Closing Trade – AMZN call back spread

Stock / Symbol: Amazon / AMZN
Price at trade post: $181.44

Option Strategy: call back spread
Max Risk: $1,770 (at Mar expiration)
Max Reward: unlimited
Profit Range: $0 - $181 & $217 + (at Mar expiration)
Realized Reward: ($9.16)

Reasoning: We're closing out this trade here at break even. The beauty of a call back spread ahead of earnings is that it enables you to participate in profits from a big up move, and also allows you to get out of the trade at around break even if the stock crashes (as was the case with AMZN) or goes nowhere.

Trade Details:

BTC -2 AMZN Mar11 180 Calls
STC 3 AMZN Mar11 190 Calls
for a net debit of $2.40 per contract

Cost/Proceeds ($230.00)
Option Requirement $2,000.00
Total Requirements $1,770.00
Estimated Commission $12.95

Non-members, click here for access

Speak Your Mind