Jeff 12:16 pm on Tuesday, February 19, 2019
Tags: DoubleCalendar ( 209 ), Earnings ( 3,108 )

HLF dub cal

#Earnings Bought to Open $HLF Feb22/Mar01 57.5 #DoubleCalendar for .45. (Got it for .42 in a TOS account)

john4419 12:26 pm on Tuesday, February 19, 2019

Followed you in at 0.33
kp 12:42 pm on Tuesday, February 19, 2019

Hi Jeff

whats your max risk on this trade ? can you get the stock called or put to you ?

thanks
kp
Jeff 3:21 pm on Tuesday, February 19, 2019

For any strategy you are BUYING options, your max risk is the cost of the trade. So .45

You only risk early assignment if you do not close the trade tomorrow and the stock price is far away from your strike. And if you are not assigned early, you WILL be assigned long or short stock at Friday’s close.

The idea is to close the trade as quickly as possible when stock price is close to your strike. However, I will often wait a day or more if I want stock to have time to move closer to my strike. Also, as we get closer to Friday, the short options that expire this Friday will deteriorate quickly while next Friday’s long options will retain much of their value, meaning potentially higher profits as the week progresses. In fact, the highest possible profit is at Friday’s close, if stock ends the week right at my strike.
- kp 5:01 pm on Tuesday, February 19, 2019
  
  thank you for the explication
  
  regards
  - kp 5:02 pm on Tuesday, February 19, 2019
    
    sorry. * explanation
- john4419 3:02 am on Wednesday, February 20, 2019
  
  Jeff, Appreciate the information, still trying to get my head around these trades! so far its about 50/50, some have been profitable, although small and others assigned.
  
  Would appreciate if you would post your progress with this trade, if time allows. that might help me follow and see if I’m on the same path. ONLY if time allows.
  - Jeff 5:59 am on Wednesday, February 20, 2019
    
    I always put in an order before the open. Prices jumped around wildly at the bell and some times can give you a favorable fill.
    
    HLF is opening well, pretty close to our strike. Modeling on TOS showed about $110 profit for today as max, so my order will be to sell for 1.50 (debit + profit).
    - john4419 6:04 am on Wednesday, February 20, 2019
      
      Does this mean closing the full position?
      - Jeff 6:18 am on Wednesday, February 20, 2019
        
        Yes, but it’s entirely up to you. This order is unlikely to fill. I will then lower the price some. If price moves away from me quickly, I may have to wait until a later day for it to drift back.
        
        john4419 6:20 am on Wednesday, February 20, 2019
        
        Thanks Jeff
        
        Jeff 6:35 am on Wednesday, February 20, 2019
        
        Lower my order to 1.20. Volatility in the front week is not dropping yet, so price on the spread is not able to go up much yet.

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