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 NETEASE  (NTES). Currently it is trading for $346.85.

CHARACTERISTICS

There is a 93.6% chance the stock will close below 385.00 on 01-19-2018, and you will earn your target return of $51.15. There is a 93.7% chance the stock will close below 385.17 on 01-19-2018, and you will earn a profit. There is a 4.3% chance the stock will close above 390.00 on 01-19-2018, and you will have a total loss of $1,448.85.

ENTRY PLAN

To enter this position you will sell 3 call options expiring on 01-19-2018 with a 385.00 strike price and buy 3 call options expiring on 01-19-2018 with a 390.00 strike price. This will produce a net credit of $0.20. The commission for this trade will be $8.85.

DISCLAIMER

All information presented here is current as of January, 5 2018 11:49 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 NTES to close below $385.00 on January 19, 2018 to earn the targeted return. NTES closed at $325.55 which resulted in a return of $51.15.