JCI has fallen more than 2% three days in a row. Sucks to be me, and long. But I’m bullish in the long run.
But the $30 calls for July were trading at $3.60 and $3.90 while the stock was sitting at $33.10.
The gift part comes in, because the $35 calls were trading between at $1 and $1.10.
Do the math on this, hit the ask on the $30’s and the bid on the $35’s. That position sells for $2.90 but had $3.10 in value - before you do anything. So, I did, but I wrote ‘em in the middle of the bid/ask on the $35’s, and got hit at $1.05 instead of a $1.00 so I paid $2.85 for the combo, and by the time my order filled the stock was already at $33.20. SO, I paid $2.85 for something already worth $3.20, more than a free quarter. Now, I don’t normally go long front, or second out, it can go against me - so I only bought 2 contracts…less than $600 invested, after fees.
All I’m saying is, my break even point is $32.85, so I’m already in the green as soon as the order executed. If JCI moves up at all, or stays level between now and July expiry, I get those free quarters. Yah, I only picked up 200 free quarters, but it’s still $50, and I think the upside is good compared to the downside.
Numbers wise, the downside is my $570, and upside is $430…but, I’d actually like the 200 shares at $32.85 anyway - sooo this was a no brainer.
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