Stock / Symbol: [private_monthly]Baidu / BIDU[/private_monthly]
Price at trade entry: $113.09
Price at trade adjustment: $114.80
Option Strategy: calendar call spread
Max Risk: $520
Max Reward: $318 (at Nov expiration)
Max Called Return: 61%
Uncalled Return: 43%
Profit Range: $107.96 - 123.54 ( at Nov expiration)
Max Profit at: $115
Adjustment: We're going to buy back the short Nov 115 call here. We sold it for $4.04 and we can buy it back here for $2.42, for a $162 profit (67% on the short call). We're then going to immediately sell a Nov 120 call at around $0.80. Our reasoning is that we think this stock will continue higher from here by next Friday's expiration. If you like, you can also just close out the whole position for a net gain of about $86 which equates to a 16.5% return on the entire trade - not too shabby.
Trade Details:[private_monthly]
BTC -1 BIDU Nov10 115 Call @ $2.42 = $242 (debit)
STO -1 BIDU Nov10 120 Call @ $0.80 = $(80) (credit)
for a net debit of $1.62 per contract
Estimated Commission $12.95
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Chart:[private_monthly]
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