Trade Exit – TZA Calendar Call Spread

This post is restricted to paying members. To follow are specific new trade details:

Stock / Symbol: Direxion ETF Small Cap Bear / TZA
Strategy: Calendar Call Spread
Trade entry date / price: 14 Feb 2020 / $33.60
Price at this post: $34.05

Reasoning: The combination of a market pullback and increased volatility has our position in TZA doing pretty well. We're going to see if we can close it out today for a quick gain. The position's current Greeks are: 67.5 Delta, 8.4 Theta and 9.9 Vega.

Closing Trade Details:

STC 2 TZA 17Apr20 35 calls
BTC 2 TZA 21Feb20 35 calls

For a min net credit of $2.15 per contract (day order, limit order). The mid is currently at $2.08. If we're not filled today, on Monday we'll look to either just sell the long calls and close out the trade or sell another round of short calls.

Analysis:

Max Risk: $320
Max Reward: $125 or 39% with TZA trading at $35 by Feb 21st
Profit Range: TZA trading between $33.50 and $36.75 by Feb 21st
Estimated Commission (round trip): $12
Expected Profit / Loss upon fill: $110 or 34% (pre-commission)

Positive Theta

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