8/24/2008 1:57:47 PM
Greetings, J.E.D.I.
Welcome to The J.E.D.I. Trader.
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Sell one (1) Mini-Sized Dow 11,600 Call Option (Ticker Symbol: YMU811600C) Limit 231.00
Current Price for the Futures: $11,617.00 for the Futures
Current Price of the September 2008 MiniSized Dow 11,600 Call Option: $231.00
Total Cost | ($1,155) |
Initial Margin Requirement | $2,919 |
Maintenance Requirement | $2,335 |
Total Requirements | $2,919 |
Estimated Commission | $12.99 |
Expiration Date of Options Contract: September 19, 2008
Tick Size: 1 point = $5.00
Breakeven Point:
The breakeven point for selling one September 2008 Mini-Sized Dow 11,600 Call Option at $231.00 limit on Monday, August 25, 2008 is $11,825.80 (assuming you get filled at $231.00). That is, this position will begin to lose money if the Mini-Sized Dow closes above $11,825.80 at expiration. (231x5 minus (12.99x2 commissions) divided by 5 tick size + 11,600)
Note: If the September 2008 Mini-Sized Dow 11,600 Call Option closes below 11,600 at expiration (September 19, 2008), you will be able to keep the option premium of $1129.02. (231x5 minus (12.99x2 commissions))
Note: If you sell to open one September 2008 MiniSized Dow 11,600 Call Option (Ticker Symbol: YMU811,600C) and buy to open one September 2008 Mini-Sized Dow 12,050 Call Option (YMU812,050C), your total cost and inital margin requirements would be as follows:
Total Cost | ($880) |
Initial Requirement | $1,408 |
Maintenance Requirement | $1,126 |
Total Requirements | $1,408 |
Estimated Commission | $25.98 |
My fellow J.E.D.I.,
Please see the daily and weekly chart for the September 2008 MiniSized Dow below DATED August 22, 2008.
WEEKLY CHART
Summary:
So, sell one September 2008 11,600 Call Option (Ticker Symbol: YMU811,600C) at a limit price of $231.00 AND buy one September 2008 12,050 Call Option (Ticker Symbol YMU812,050C) at a limit price of $55 just in case I am wrong about the bearish direction of the September 2008 MiniSized Dow Index.
Note: Your initial margin requirment will be lower if you do not execute the orders separately but rather as a spread. That is if you simultaneously place one order to sell to open one September 2008 11600 Call Option and buy to open one September 2008 12,050 Call Option at a limit price of $176.00 (the difference between the $231 call option premium for the selling of the 11,600 Call Option and the $55 call option preimum for the purhcase of the 12,050 call Option)
Good Luck!
And may the force of volatility will be with you.
Best Regards,
