This is called a bull call spread. You are simultaneously long the 4 call and short the 7 call.
This is considered a very conservative strategy because your effective cost per share is only $5.55
This is also a play for capturing option time premium. In the event of some good news and the share price were to rally, you could close it out for an immediate profit. Also, in case of a price decline, you could close out your short call position for a profit and then just hold the long call position.
There are hundreds of different possible option strategies. Try doing calculations for some different strategies based upon risk/reward.
Here is a strategy I recommended to my friends for MNKD. This is intended to supplement to their long position.
Long Aug 4.00 call / Short Aug 7.00 call
With MNKD at 6.80, this spread could be bought for a debit of around 1.55
Your effective share price and breakeven price is 5.55
You will make 93% if share price is above 7.00 by exp.
Are you saying that the HF traders actually take a directional position, such as being net short?
I thought their advantage is just being able to front run the orders.
Today I bought some calls spreads on GOOGL to play the run up to earnings. I will probably sell them just before earnings are announced.
Looking at the 10 week/hourly chart, there is a price pattern which had occurred on Jan 31 which is similar to today's price action. Each had around a 20 point spread between the turnaround price between the high and low. A mirror image pattern?
Looks like a lot of money is being rotated into GOOG and GOOGL today.
Imagine how much more GOOG would have gone up today if it had been a 10:1 split.
If you want to convert your C shares to A shares, but do not want to pay the taxable gain on your 2014 taxes, then there is an easy way to do this.
Sell short one deep ITM Jan 2015 call against your C shares AND buy one deep ITM Jan 2015 call on the A shares for each 100 shares. If the strikes are the same, this trade should essentially be a push with respect to the long and short calls. Your effective position would then be long 200 A shares.
"Poor Dan..." ???
He is worth 2.2 billion
By having so much money, he does not have to incur additional risk by owning stocks near their highs. No need to buy at the low and sell at the high.
He only wants a slice of the pie. Not the whole pie.
Yesterday's low was 32.46 before it collapsed about an hour later.
Today's high is 32.46
Is this mere coincidence?
Okay, we all know that the previous low becomes resistance.
Anyone scaling in for a rebound?
BAGHDAD/LONDON, March 25 Tue Mar 25, 2014 9:26am EDT
(Reuters) - The Central Bank of Iraq has bought 36 tonnes of gold this month, it said in a statement on Tuesday, in a bid to help stabilise the exchange rate of the Iraqi dinar against other currencies.
The purchase marks the first addition to Iraq's gold reserves since it lifted its holdings by 23.9 tonnes in August 2012, according to data from the International Monetary Fund.
Added to the 29.8 tonnes the World Gold Council says it already held, the purchase brings Iraq's total gold holdings to 65.8 tonnes, making it the 43rd largest official sector bullion holder in the world, after Denmark and just ahead of Pakistan.
At current market prices the purchase was worth $1.5 billion."
Hillary should step away from politics. People like Sarah Palin and perhaps even Hillary has the potential to become the next Oprah.
It just bounced off of 32.44 which was the low supports for March 3 and March 14.
I just bought some calls for a trade. This should provide some support if the market holds up.