Option Trading – Bull Call Spread

Posted on April 20th, 2012 admin

This is a recent trade of Option Expert William Chien, if you are interested in speaking to William about his option trading strategies call 07 5504 2244.

(This publication is not providing advice, it is just published as an example.)

 

FXJ appears to be resting on its long term uptrend line at the $0.72 level before it moves higher again (see below daily FXJ chart).

 

Hence, I would recommend the following FXJ bull call spread trade to take advantage of a potential rise in the FXJ share price.

 

Buy 400 May FXJ $0.75 call & Sell 400 May FXJ $0.85 call for a net debit of about $0.02 per spread GTC; costing about $800 in premium (before brokerage)

 

  • Low risk: maximum potential loss = $800 plus brokerage
  • No ongoing margin requirement
  • High potential profit: if FXJ trades up to $0.85 as per my projection, then we will achieve a profit in excess of $2,000 (see below payoff diagram)

 

Although the recommended trade size is 400 spreads, client can elect to trade a different size to suit their risk tolerance.

Please ring the Dealing Desk and ask for William on 1300 73 66 22 if you are interested in his Option Trade.

 

Option Trading - Bull Call Spread

Comments are closed.