free option strategy

Bear Call Spread – Free Trade Idea

Every Friday we give you a free options trade idea identified by Option Party. Today, we’re focusing on the Bear Call Spread.

OPPORTUNITY

There is an attractive bear call spread trade in DIREXION DAILY GOLD MINERS BUL (NUGT). Currently it is trading for $42.47.

CHARACTERISTICS

There is a 94.9% chance the stock will close below 56.00 on 09-29-2017, and you will earn your target return of $312.95. There is a 95.1% chance the stock will close below 56.18 on 09-29-2017, and you will earn a profit. There is a 0.9% chance the stock will close above 62.00 on 09-29-2017, and you will have a total loss of $9,887.05.

ENTRY PLAN

To enter this position you will sell 107 call options expiring on 09-29-2017 with a 56.00 strike price and buy 107 call options expiring on 09-29-2017 with a 62.00 strike price. This will produce a net credit of $0.20. The commission for this trade will be $27.05.

DISCLAIMER

All information presented here is current as of September, 8 2017 10:36 am (EST). All trading involves risk. Free trades ideas are presented for illustrative purposes only and are not to be construed as financial advice.


How Did We Do? The Results…

This trade employed a Bear Call Spread strategy that needed NUGT to close below $56 on September 29, 2017 to earn the targeted return. NUGT closed at $31.84 which resulted in a return of $312.95.