neutral to bullish BXB ( asx) - bull credit spread
Updated
This is based on ' The Anty' strategy in which after a normal correction degree, there is at least the same or better recovery in price - a neutral to bullish strategy is bull put spread ( paid a credit) and with only 8 days until expiry benefit from time-decay at a fairly high probability scenario....it needs to close below 10.98 at expiry ( using european style options) so get exercised and forced to purchase stock at this price ( 500 shares contracted). There is put protection below at 10.48 so if really falls hard the most I can lose is -$500 ( fixed loss). Of course I would hold the stock until at least recover the loss as an attractive price over 3 months...
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This sold PUT is gone 'into the money' but as European I can wait until expiryon July15th to see if price recovers > 10.98 and I am NOT EXERCISED.
Otherwise, I will to decide whether to roll it down or exit for smallest loss possible - as time decay will help this....
Trade closed manually
At 1 day before June 25th expiry I must do evasive action to avoid being exercised and taking delivery of the stock plus brokerage costs which can be steep. I have decided to roll out & down one strike until next Month expiry in July 15.
This way if successful I will come out at break-even and not take delivery of the stock.
As I have success on 4 out of five put bull ( credit) spreads this means I've had a 20% failure rate...which makes it a successful strategy given I may not take any loss at all if this plan works and the stock rallies at least > 10.75
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