Home › Forums › Swing Trades › Breakout Trade in ILMN › Reply To: Breakout Trade in ILMN
September 12, 2013 at 1:35 pm
#2615
Steven Place
Keymaster
The breakout worked very well and the stock reached new 52 week highs.
To take some profits off the table and reduce risk, consider a technique called “spreading”
This is where you take your long call, and then sell a new call at a higher strike price. This moves your trade from a long call to a bull call spread.
Before (on 5 contracts)
After – by selling the Oct 85 call against:
This reduced delta, increases theta, and reduces max reward. From here, if ILMN pulls back, you can close out the short calls for a profit and then keep the long calls on.