Perfect Week to Write Weekly Options
Good morning TRADEPROs,
This week is shaping up to be another good opportunity for a quick cash generation trade using weekly call options. What makes the market so ideal?
- Markets are closed this Friday in observance of Good Friday
- This means, weekly options expire on Thursday April 2nd
So fire open those options trading platforms and build out a few credit spreads. Here is one I placed this morning on my account.
Apple, sitting inside a pennant, and holding the $121 support. The stock has high probability of closing above $121, (85% according to options markets)
- Short 10 April 2nd 121 Puts – $0.39 premium generation
- Long 10 April 2nd 119 Puts – $0.15 cost
- Net total credit: ($0.39 – $0.15) x 10 x 100 = $240
- If price above $121 on Apple tomorrow as of close, the money is all yours
- Max loss is (121-119 ) x 10 x 100 = $2,000
- This loss comes with a 5% probability, so $100 expected loss on $240 cash generation
Now that’s a TRADEPRO setup!
Good luck and good trading, and from us to you and your family – Happy Easter!