That was the illustration, correct. However, I am not doing this transaction (personally). It was a suggestion.
I find that bull spreads, while profitable, can muddy the water and cloud my overall goals. Basically, I find it difficult to work (at my normal job), and keep track of options positions in the manner that you need to do. That's OK for long positions, but when you have a short involved, you ought to have your hand on the switch. I'm sure that a more experienced trader will cite my inexperience as the reason for my inability to keep track. I would say that it is important to maintain focus and keep your plate as uncomplicated as possible.
My other problem with the JDSU bull spread is that it is limited to a short term gain (unless you can exercise the 220s w/o being called out of the shares at 300). My suggestion was an illustration of what I would do if I wanted to try and get into the 220s, and hopefully NOT be called out of the 300s. However, I think that you would be likely to get called.
The June calls may be worth looking at, too. March has little premium in most examples. Since collecting big premium on the OTM short call side is the goal, you need to look at expiration dates where that situation exists.
Hope this helps.
Regards,
LoF |
