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Facebook: Potential Bull Spread That Cannot Lose

By Stock MarketsNov 19, 2012 07:25AM GMT Add a Comment
 
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FB - 60 Min
FB - 60 Min

I’m tracking 24 Mar 30 Facebook (FB) calls acquired for an average 0.375. Continue to offer 24 March 33 calls short against them for 0.50. If successful, we’ll have legged into a vertical bull spread that cannot lose.

The best we could do would be to make $7200 on the position if Facebook is trading $33 or higher come March expiration. And the worst? That would be with the stock below $30, which would still produce a trading gain of $300. The stock, meanwhile, looks bound for the 25.36 target of the pattern shown, having blown through its ‘p’ midpoint sibling at 22.12 on Friday.
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