Originally Posted by
JamesBond
OK. you make a compelling argument. At what point do you close out of the 2900 option? With your spread, you could sell.... what.... carry the one.... ummmm... 25 of those and net $75K in premiums... for the same $300K. am I reading that right?
i don’t look at each leg as an individual position, but as a one. For a call spread like that, I’d aim for 50% profit if I’m being conservative. Otherwise If things are going well and im comfortable with the movement of the underlying I target 80% profit for the whole position. On a position like this (I toyed with it today in fact) I’d but a GTC order in for 80% profit at $6. Once the GTC triggers, It will close out both legs. If you’re super bullish and a week before expedition rolls around an AMZN is at $4000, I’d consider letting it go to expiration for 100% profit. But my personal rules for spreads is to target 80%
if that makes sense?