Stock / Symbol: GoodYear Tire / GT
Option Strategy: call spread
Price at Trade open on Sep 2nd: $10.05
Price at Trade close: $11.65
Trade:
BTC -5 GT Jan11 11 Calls @ $1.04
STC 5 GT Jan11 9 Call @ $2.69
for a net credit of $1.65
Analysis: Well, it took a few days but we finally got filled at $1.65, yielding us a nice 65% gain. If you like, you can hold out to January expiration and, if GT stays above $11, you'll get around $2 for a 100% gain. Compare this call spread vs just buying the 9 strike call at $1.89 on 9/2 which is up 42% and vs just buying 500 shares of GT which are up 15.92% from our entry point.
Max Risk: $500
Realized Reward: $325
Return: 65% (before commissions)
Chart:
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