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October 17th, 2009 at 8:46 pm
Phil, if you have time could you comment on the pros and cons of this strategy I came across for playing APPLE on Monday. Just wondered what the risks are of this approach…….assuming you like apple in the next month.
Nov call spread: buy 190 ($7.80), sell 200 ($4.10) costs: $3.70
finance by selling 175 put for $3.55
if apple falls below 175 you start losing, but if it rises just above 190 you start making money and can make 9.85 if apple rises to 200 by Nov expiration.