Stock / Symbol: Canopy Growth / CGC
Strategy: Diagonal Call Spread
Trade entry date / price: 15 Jan 2020 / $24.82
Price at this post: $21.30
Update / Adjustment: CGC has moved up significantly since our last adjustment, so much so that we're now up nearly 50% on the trade. This is a great example of trade management since the stock is still trading 14% lower than it was upon trade entry. With CGC reporting earnings tomorrow morning, we're going to take the risk off the table and lock in our profits.
Current Position:
Long 2 CGC 15Jan21 25 calls
at an effective cost of $2.225 per contract
+
Long 1 CGC 15Jan21 17.5 call
Short 1 CGC 29May20 18 call
at an effective cost of $2.11 per contract.
Closing Trade Adjustment Details:
First:
STC 1 CGC 15Jan21 17.5 call
BTC 1 CGC 29May20 18 call
For a minimum net credit of $2.40 per contract (GTC order, limit order). The mid is currently at $2.60. I was filled at $2.56
Then, once the above closing order is filled:
STC 2 CGC 15Jan21 calls
For a min net credit of $3.25 per contract (GTC order, limit order). The mid is currently at $3.32. I was filled at $3.25
Analysis:
Max Risk: $625 (decreased from $655)
Max Reward: unlimited with CGC trading over $18.50 by May 29th
Profit Range: CGC trading at/over $18.50 by May 29th
Commission (round trip): $24
Realized Profit / Loss: $297 or 47.5% (pre commission)
