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Hari Swaminathan
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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
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  • 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)

    PCLN-trade

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

    Themes: Bear Call, PCLN Stocks: PCLN
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  • auinvestmentedu
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    12 Sep 2013, 02:48 AM Reply Like
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