Closed Trade – JDSU

Stock Symbol: JDSU

Entry date: 8/18/10
Exit date: 9/09/10
Price at time of Trade: $10.53
Price at time of Exit: $10.87
Option Strategy: Call Spread

Trade Breakdown:
Trade Date | Action | Symbol/Desc. | Qty Price | Comm. | Net Amount | Gain/Loss for symbol
09/09/2010 O STC JDSU Dec10 10 Call 5 $1.60 $12.95 $786.98
08/18/2010 O BTO JDSU Dec10 10 Call 5 $1.59 $6.48 ($801.53) -14.55
08/31/2010 O BTC JDSU Dec10 13 Call 4 $0.18 $0.00 ($72.04)
08/31/2010 O BTC JDSU Dec10 13 Call 1 $0.18 $12.95 ($30.96)
08/18/2010 O STO JDSU Dec10 13 Call 5 $0.48 $6.47 $233.47 $130.47

Total Realized Gain/Loss for JDSU $115.92
Gain: 24.03% / 20.41% after commissions

Post Trade Analysis: Although JDSU only moved up 3% from the date we entered this trade, we netted a 20% return. Also, because we also sold a call option in addition to just buying a straight call (making it a call spread), we were able to sell the long call option for just $0.01 (one penny) more than we paid for and still get a pre-commission return of 24% vs only a 0.6% return had we just purchased the 10 strike call.

Chart:

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