Trade Adjustment – diagonal call spread

tock / Symbol: [private_monthly]United States Oil Fund / USO[/private_monthly]
Option Strategy: diagonal call spread
Price at trade opening: $37.40
Price at Jan 26 adjustment: $36.25
Price at Jan 31 adjustment: $38.30
Price at this adjustment: $38.50

Adjustment: Due to the turmoil in Libya, we've gotten a big bump in [private_monthly] USO[/private_monthly]. So, we're going to sell calls against our long position.

Existing Position:
Long 2 USO Jul11 36 Calls @ $4.07
(with sale of Feb 40 and Feb 39 calls, we've reduced cost basis down to $2.86 per contract)

Trade Details:

STO -2 USO Mar11 39 Calls
for a net credit of $1.12 per contract or $224

Max Risk: $348 (adjusted down from $726)
Max Reward: $496 or 142% (adjusted)
Profit Range: $35.55 + (adjusted)
Price at Max Profit: $39

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