Today I’m going to walk you through a recent trade on AAPL stock which started as a bullish calendar spread which was then adjusted into a double calendar.
On October 15th, AAPL was trading around 121 and we entered the following trade.
Trade Details: AAPL Bullish Calendar Spread
Sell 7 AAPL November 6th $125 calls @ $3.80
Buy 7 AAPL November 20th $125 calls @ $4.80
Premium: $700 Net Debit
By October 26th, AAPL had dropped to 115 which was approximately the lower breakeven point and the level I had set as my adjustment point.
I added a second calendar at 105 to turn it into a double calendar.
Trade Details: Conversion to Double Calendar
Sell 7 AAPL November 6th $105 puts @ $1.20
Buy 7 AAPL November 20th $105 puts @ $2.09
Premium: $623 Net Debit
Total at Risk: $1323
Before Adjustment
After Adjustment
Fast forward to November 2nd and AAPL was trading at $107.69 and the double calendar was in profit to the tune of $154 or around 12%.
With only a few days until expiry, this was a good place to take profits.
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