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BookingAlpha Option Trading Advisory

Thursday, September 13, 2012

September RUT Bear Call Spread closed

BUY TO CLOSE 6 September RUT 860 CALL @8.00
SELL TO CLOSE 6 September RUT 865 CALL @5.50

Debit: 2.50 

The initial trade had been entered for a CREDIT OF 0.65. Closing the spread for 2.50 debit results in a loss of 1.85. In 6 contracts per leg = 6 * 1.85 * 100 = $1110. See order execution below.

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This happened a few minutes after the QE3 announcement by the Federal Reserve.

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I'm not rolling over to October as the premiums don't justify the added risk. The 900/905 Credit Call spread was priced at 0.65 at the time of this writing. Only about 4% away, in more than a month to expiration for that credit is not good enough.

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