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Express Scripts. ((ESRX)) This was a level 3 or 4 put bear spread. You would have needed a margin of $1300; right now you could close the spread out and capture $1300 profit. The best play would buy an offsetting position in the Feb $45 puts to capture premium. The current cost of those puts you sold earlier during this spread were $2.20 - the cost today of 15 cents, net profit of $2.05. Next month, will look for another bear spread premium play…
Express Scripts ((ESRX)): total cost was$2600 plus margin of $1300. This was a Bear time spread, using Jan 45 puts in 2007 and Feb'06 $45 puts. This strategy was for advance users who understand calendar spreads. . I know some traders live for these calendar spread, but I am not a big fan on using margin for long term. The max profit potential would be on Feb 2006 expiration date. If the Express Scripts stock price is at $55, the put options expire worthless. . You get the entire premium you wrote for $2.20 on 20 contracts. This strategy is for advance options players who have Level 2 or 3 account status. I like to keep things simple, but sometimes these calendar spreads are guarantee winners, no matter what happens
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