Closing Trade : INFY

Stock / Symbol: Infosys / INFY

Option Strategy: [private_monthly]double calendar call spread[/private_monthly]
Trade entry date: Apr 11
Price at trade entry: 56.51
Price at this post: 47.15

Reasoning: While the INFY beat earnings estimates, they provided poor guidance, causing the stock to gap down. A painful reminder to get out of the way ahead of earnings. Rather than try to adjust, were just going to take the loss here and look for a new opportunity.[/private_monthly]

Closing Trade Details:
[private_monthly]

STC 3 INFY Jul12 55 calls
BTC -3 INFY Apr12 55 calls
for a net credit of $0.50 (day order, limit order)
then,
STC 3 INFY Jul12 57.5 calls
BTC -3 INFY Apr12 57.5 calls
for a net credit of $0.25 per contract (day order, limit order)

Adjust ask price as necessary if not closed out by 3pm EST today.

Max Risk: $1050
Max Reward: $800 or 75% by Apr 20
Profit Range: $52 to $61 with max profit between $55 - $57.5 by Apr 20
Suggested Downside Stop @: $52
Suggested Upside Stop @: $61
Realized profit / loss upon fill: ($800)
[/private_monthly]

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Comments

  1. Robert Zimberg says:

    Why close out the short option and pay a commission? Most likely they will expire worthless.

    Where are all of the other comments?

  2. Robert, the reason to close is to avoid the capital requirements to cover the naked options.

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