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Sell ITM vertical credit 5-point spread for HD for $3.03 or more.
Upon entering set an exit price at $0.66.
Setting Stock recently took a hit and you are expecting a slow steady recovery Capital requirement 5-points ( $500) Max loss: 5 – 3.03 = 1.97 ($200) Max gain 3.03 – 0.66 = 2.37 ($234) Recommended lot size x5 Examples on November 20 enter HD +5-5xDEC215-220P for 2.02 (HD is at 222)
on December 19 (one day till expiration) exit HD +5-5xDEC215-220P for 0.66 (HD is 220)on December 23 enter HD +5-5xJAN220-225P for 3.03 (HD is at 219)
on January 16 (one day till expiration) exit for 0.66 (HD is at 227)
Right now – 2020-02-01 SAT – the thought is that the whole market is ready to tank, plus HD gained sinificantly in January, so it is a good time to sell ITM vertical credit call that will loose value as HD moves lower.
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