Hello everyone welcome back. 1
This is 3rd of May and this is the expiration day today on 29th of April. 2
I entered in a bull call spread. 3
here when stock was trading at one ninety four point thirty dollar and now today is the expiration day 4
The stock is trading at one ninety six point zero three dollar. 5
See this black line is the strong resistance level for the prices 6
You can see there was a tap on this level on this black line that was acting as the resistance line. 7
Again prices are going to touch this line in upside. 8
But as this line is the 9
2.618 level of Fibonacci extension tool that I have applied to the previous swing that's 10
why this level will act as important resistance level for the prices. 11
That's why I was moderately bullish for the prices. 12
So I entered in a bull call spread. 13
I bought the call option here for the current expiry and I sold one call option of 195 strike 14
and the prices were 192.50 strike was trading at 2.95$ and I sold 195 15
strike call option that was trading at 1.62$ 16
Here we are selling the call option so we will see the bid price and we are buying one ninety two point 17
five strike. 18
So we will see the ask price and that is two point ninety five dollar. 19
So here the cost of trade was one point three three dollar for one Lot as the lot size is 100 20
So our total investment for this trade was one thirty three dollar and the maximum profit was one hundred 21
and seventeen dollars in this trade. 22
So approximately it is ninety five percent return in this trade. 23
The maximum return was ninety five percent. 24
and if we see the prices of these call option today the stock is trading at one ninety five point 25
seventy eight dollar and we will see the options chain of Facebook incorporation for this expiry 26
one ninety two point fifty strike is trading at three point ten dollar here 27
We bought this call option. 28
Now we will sell this call option so we will see the bid price. 29
That is three point ten dollar. 30
and we have sold one ninety five strike that is trading at one point zero four dollar. 31
So in this trade our total investment was one thirty three dollar in a single lot 32
and now we are getting 73 dollar 33
So it is approximately 54 percent return in this trade in a single lot 34
So when our view is moderately bullish we should enter in a bull call spread and I was moderately 35
bullish in this stock because it was a gap up opening and above this red candle 36
There was a strong resistance level. 37
That's why I was expecting that prices will go in upside because momentum was very high. 38
This was a gap up opening but as above this candle there was a resistance level. 39
So I was moderately bullish up to this level only that's why I entered in a bull call spread and trade 40
is successful. 41
We got a 50 percent return in just three days.