Trade Adjustment : CSCO

trade adjustmentStock / Symbol: [private_monthly]Cisco Systems / CSCO[/private_monthly]

Option Strategy: calendar call spread
Price at trade entry: $16.70
Price at previous adjustment: $16.00
Price at this adjustment: $16.76

Current Position:[private_monthly]
Short -6 CSCO Aug12 17 calls
Long 8 CSCO Oct12 17 calls
Short -6 CSCO Aug12 16 calls
Long 6 CSCO Oct12 16 calls
Short -6 CSCO Aug12 15 calls
Long 6 CSCO Oct12 15 calls
Long 1 CSCO Aug12 17 put

Reasoning: With CSCO moving up, we're going to make an adjustment to position our trade back within the standard deviation calculation for CSCO (on August expiration) between [private_monthly] 15.70 and 17.90. To adjust, we're selling our Aug 17 put. With this adjustment, we're taking off our upside stop.[/private_monthly]

Trade Adjustment Details:[private_monthly]

STC 1 CSCO Aug12 17 put
at the market


Max Risk: $724
Max Reward: $300 or 41% at $16 by Aug 17
Profit Range: $14.50 - $17.50 by Aug 17
Suggested upside stop: @ NA (was 18)
Suggested downside stop: @ 14.30


  1. Thomas Tampi says:

    Are we going to let the Aug Calls expires in 3 days or are we going to roll to Sept at this time? Position net loss is about $60 now.

  2. Thomas, The only tricky part for this trade now is that CSCO reports earnings Wednesday after market close. I’d prefer to just close the entire trade on Wednesday but it looks like our profit would be rather slim at that point. For example, with the stock right here at 17.25, our profit on Wednesday should be about $20 but would be closer to $200 on Friday afternoon. So, what we’ll likely do is buy back one more of the Aug12 17 calls between now and Wednesday. Do so will give us a profit range of $14.85 +, with max profit at $16, good profit at $17, and a small profit at $18. No matter what, however, we’re exiting the entire trade this Friday.

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