Monthly Cash Machine Newsletter, Sunday, 03/16/2008 06:16:41 PM ET
ADDITIONAL MCM DJX APRIL 2008 POSITION 3-16-08
by Steve Gail
HAVING TROUBLE PRINTING?
We are going to place a credit spread on the call side of our APRIL DJX Monthly Cash Machine Position. We are going to place the following specific call credit spread as noted below. In addition , if you have the right broker this position will not tie up any additional margin, if you have already have the DJX put credit spread in place that was given out last week.
When this position is filled you will have in essence an iron condor in place with:
The upper position being short at DJX 132/134 = DJIA 13,200
The lower position being short at DJX 106/104 = DJIA 10,600
We are recommending the following specific DJX APRIL call credit spread
(call credit spread - bearish call spread)
|BUY DJW-DD ^DJX APR $134.00 CALL DEBIT = $0.13
SELL DJW-DB ^DJX APR $132.00 CALL CREDIT= $0.24
NET CREDIT = $0.11
INITIAL "NET- CREDIT TARGET= $0.11 or $11.00
POTENTIAL PROFIT ( X 50 CONTRACTS @ $0.11 = $550.00
MARGIN REQUIRE. 50 CONTRACTS $9,450.00
RETURN ON INVESTMENT= 5.82%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE: $2.00
1. INDEX WILL BE PLACED ON WATCH LIST IF INDEX PRICE RISES TO: $127.00
DIFFERENCE IN THE STRIKE PRICES WILL BE OUR MAXIMUM EXPOSURE - WE WILL NOT USE STOPS ON THOSE POSITIONS. THEY WILL GO ON THE WATCH LIST AND BE FOLLOWED WITH INSTRUCTIONS AS TO HOW TO PROCEED OR/WHAT EXIT POINT NEEDS TO BE ESTABLISHED
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