July 25, 2016 at 9:09 am #6532
Pretty smple idea here.
The stock was on the brink of death back in February and is a double off the lows already. It has earnings next week and if it clears 60 before that we will most likely see continuation higher as investors bid up in anticipation of the event.
I’m looking for a 30 minute close above 60 per share to play the stock.
The setup specifically is the Aug 60/65 bull call spread for 1.80 – 2.00. The option spreads are not the most liquid but I think it’s still fillable.
A close under the 50 day moving average will stop me out.
Attachments:You must be logged in to view attached files.July 25, 2016 at 3:31 pm #6550
Aug 60: 2.35 x 2.55 -> mid: 2.45
Aug 65: .75 x .85 -> mid: .80
Full Time Profits Order Ticket Type Asset Duration Strike C/P BTO SPLK Aug 60 Call STO SPLK Aug 65 Call Total Debit: 1.65
Stop on a daily close under 50 DMA.
July 25, 2016 at 4:21 pm #6551Al huhn HuhnParticipant
- This reply was modified 6 years, 4 months ago by Steven Place. Reason: changed credit to debit
i assume that the bull call spread is a debit of ~1.65August 10, 2016 at 11:21 am #6703
Going to do a diagonal roll on the long calls. This will convert the trade from a vertical to a calendar. It will add upside risk, remove downside risk, and take cash off the table.
So from an Aug 60/65 call spread it will move to an Aug/Sep 65 call calendar.
Will post risk changes shortly. Here’s the order:
Full Time Profits Order Ticket Type Asset Duration Strike C/P STC SPLK 19 Aug 16 60 Call BTO SPLK 16 Sep 16 65 Call Total Credit: 0.4
Yes, you get a credit for this so you’re taking some risk off the table.August 10, 2016 at 11:21 am #6704August 19, 2016 at 11:47 am #6777
We’re ending up with a dream scenario where SPLK is running into Aug opex right around 65, so we can close the short option and roll it out to the 70 strike.
Here’s the mechanic:
Buy to close SPLK Aug 65 Call @0.05
Sell to open SPLK Sep 70 Call @1.30
So the net *credit* on this trade is 1.25. You can execute each contract on its own, or you can do a diagonal roll like this:
IWO Premium Order Ticket Type Asset Duration Strike C/P BTC SPLK 19 Aug 16 65 Call STO SPLK 16 Sep 16 70 Call Total Credit: 1.25
Basically, this re-converts the calendar back to a vertical, but with slightly higher strikes and all the risk taken off the table. This trade is working so I’m trying to ride it for as long as possible.
Here’s the before:
And here is the after:August 25, 2016 at 2:57 pm #6822
Earnings are after the bell, so I want to SELL HALF of the spreads to take some risk off the table.
IWO Premium Order Ticket Type Asset Duration Strike C/P STC SPLK 16 Sep 16 65 Call BTC SPLK 16 Sep 16 70 Call Total Credit: 1.9
September 23, 2016 at 10:50 am #7017
- This reply was modified 6 years, 3 months ago by Steven Place.
Rest of the call spreads expired worthless.
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