Bought a bull call spread in EL.
music selection: “The Devil In I” — Slipknot
What a difference a day makes. PF twitter and Facebook was full of moaning and gnashing of teeth yesterday over some normal volatility. I held off on my normal Monday trade in case it was the start of an extended downtrend. This morning, we have a strong reversion to mean and I’m back to trading long.
With Estee Lauder (EL) showing strong profits and in a good uptrend, I have chosen it for an in the money bull call spread. With shares trading at 322.07, I bought the 310/320 BCS for 6.5486 per share (7 spreads). I am putting 4,584 in capital at risk for 32 days. I currently have 1.71% downside protection to break even. If the price holds, I will earn the full profit of 2,416, which is good for 52.7% over 32 days or 601% annualized.
Trades in FB and SPOT are currently still threatened, while three plays that were underwater at yesterday’s close are all now fully back in the money. If July expiry were today, I would be on pace to book 3,331 in short term gains on the month.
Devour your prey raptors!