Trade Adjustment : TBT

Stock / Symbol: [private_monthly]ProShares UltraShort 20+ Year Treasury / TBT [/private_monthly]

Option Strategy: [private_monthly]call ratio spread, switching to vertical call spread[/private_monthly]

Trade entry date: Oct 13
Price at entry: $20.86
Price at this post: $18.98

Current Position:[private_monthly]
Long 5 TBT Mar12 20 calls
at an effective cost basis of $1.43 per contract

Reasoning: While we're down on this trade, we still believe that treasuries and bonds will trade lower this year and TBT is great way to play the premise. We're going to [private_monthly]close the Mar12 calls and move into a vertical call spread that risks $500 to make $1,100 with TBT at or above $22 by Jan13 expiration..

Trade Adjustment:[private_monthly]
STC 5 TBT Mar12 20 calls
for a credit of $0.13 per contract (day order, limit order)

BTO 8 TBT Jan13 20 calls
STO 8 TBT Jan13 22 calls
for a net debit of $0.62 per contract

Max Risk: $496 (does not include $648 spent on previous trade)
Max Reward: $1104 or 122% @ $22+ by Jan13 exp
Profit Range: $20.65+
Suggested Stop @: $16.95


Speak Your Mind