I bought a BCS on Home Depot (HD).

music selection:  “Crazy” — Kidneythieves

weigh-in:  221.6 (2.4)

Housing and everything related is hot right now. I especially like Home Depot (HD) right now. Thus, I bought 7 bull call spreads at the 285/290 strikes and 16OCT2020 expiry. Unlike the past, only one strike is in the money. With the underlying currently at 286.20, I need the price to rise by 1.30 to break even (0.45%). Likewise, to earn the full profit I need shares to rise to 290 or 1.32%. I think there is a high probability of that with the 61 days the trade will be in force.

I have put 1,750 capital at risk in this trade. A full win would produce 100% profit (1,750) over 61 days or 1,177% annualized. Put another way, I can double my money with a 1.32% rise in the underlying. That is a lot of leverage considering the downside risk is defined.