Hari Swaminathan's  Instablog

Hari Swaminathan
Send Message
OptionTiger.com is founded by Hari Swaminathan, an entrepreneur, everyday person and a self-taught Options trader for over 5 years. Hari also writes the blog at OptionTiger.com, an insightful commentary of the most important issues in macroeconomics, investing, trading, Option strategies, Index... More
My company:
My blog:
OptionTiger Blog
My book:
Top 7 Options Trading Mistakes
  • Priceline Trade – Bear Call Spread 1 comment
    May 15, 2013 12:11 PM | about stocks: PCLN

    This post was originally written on December 3, 2012 at http://www.optiontiger.com/priceline-trade-bear-call-spread/

    Markets are marching upwards in the hope of a fiscal cliff resolution. Priceline (NASDAQ:PCLN) has moved up nicely from a level of 550 to 673 in the past month. That's a 25% move. The stock is currently above the upper Bollinger band of 2 Standard deviations, and has resistance points till 695, so I'm expecting a pullback (see Figure below). Here is a Priceline trade (Bear Call) that I'm putting on right now.

    (click to enlarge)PCLN-chart

    The trade -

    - PCLN Bear Call Spread in January 2013 series

    - Trade Rationale: PCLN crossed upper Bollinger band (2 Standard Devs)

    - Short at 725 (Delta 0.23), and Long at 740

    - Spread 15 wide, 10 contracts

    - Credit $2.7/share , Total $2700

    - Days to expiry = 46

    - Margin required = $12,200

    - Return possible = 2700/12200 = 22%, annualized return = 175% approximately

    - Adjustment point is if PCLN hits 700

    Status: Executed for a credit of $2.7/share (see figure below)

    (click to enlarge)


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: PCLN
Back To Hari Swaminathan's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • auinvestmentedu
    , contributor
    Comments (7) | Send Message
    I always read your post . As all this one is also amazing. Your thought process is wonderful. The way you have told about options trading is awesome. Thanks for sharing your information and views.


    Australian Investment Education provides option made easy program, which is very helpful and truly easy option strategies for all types of trades. See this link http://bit.ly/1e4TFvV
    12 Sep 2013, 02:48 AM Reply Like
Full index of posts »
Latest Followers

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.