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We buy back March 72.50 short call for $0.75 per contract and sell
April 75 short call for $0.36. Our net credit for the trade is now $0.47
- $0.75 + $0.36 = $0.08 per contract.
Reason for the adjustment: WMT moves past our March short call
strike price of $72.50. We move our strike price further out-of-the-money
to create more cushions for us. The price we pay for this extra layer of
protection is less net credit and the short call is exposed an extra
month on the market. Our current position after the adjustment: short
March 67.50 put and short April 75.00 call with a net credit of $0.08 per
contract.
Cheers,
Dennis Phan
潘家墉
05 March 2013
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