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.
There is an attractive bear call spread trade in TESLA (TSLA). Currently it is trading for $347.15.
There is a 95.6% chance the stock will close below 420.00 on 11-17-2017, and you will earn your target return of $275.25. There is a 95.7% chance the stock will close below 420.46 on 11-17-2017, and you will earn a profit. There is a 2.0% chance the stock will close above 435.00 on 11-17-2017, and you will have a total loss of $8,724.75.
To enter this position you will sell 6 call options expiring on 11-17-2017 with a 420.00 strike price and buy 6 call options expiring on 11-17-2017 with a 435.00 strike price. This will produce a net credit of $0.48. The commission for this trade will be $12.75.
All information presented here is current as of October, 20 2017 11:25 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 TSLA to close below $420.00 on November 17, 2017 to earn the targeted return. TSLA closed at $315.25 which resulted in a return of $275.25.