Overbought Call Spread Sale in GS

[Steven Place]

Great run in GS, but it’s running hot.

The stock has rallied 7% in the past 10 days. That is statistically significant and tends to lead to consolidation. I’m not super bearish, I just think that further upside is lower odds than what the options are currently pricing in.

Here’s the trade:

Sell to open GS Apr 200/205 bear call spread for 0.93.

If GS breaks above 193 I will roll the entire spread higher to the 205/210.

If I can get 50% of the profit in under a month, I will take the profits there too.

[Steven Place]

We’re at 50% profits and it’s been under a month, time to take profits.

Buy to close GS Apr 200/205 call spread @0.45

If the spread gets back above .95 I will resell.

[Author]

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