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What I am watching as swing trades 3
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[QUOTE]Originally posted by AJGrano: [QB] TJ, what I did was buy calls of BIDU with a strike price of $70. The stock was trading at about $67-68 at the time but I knew it would hit higher than $70 in a few weeks. When you buy the "option" to purchase a contract of 100 shares of the stock, you pay a premium per share. My premium for each share was $2 and I purchased 3 of those contracts...meaning I spent $600 in order to control 300 shares of stock if the stock hit $70. Since I paid $2 per share though my breakeven point was $72...anything over 72 was all profit and for every dollar the stock went above 72 I made $300 since I had 300 shares. So I when I finally sold the premium was 5.75 then subtract the 2 that I paid and that comes out to 3.75 per share times 300 shares. So basically turned that 600 into 1725. I don't think that thats typical but I read that chart pretty well and went for an out of the money call, which will always be a lot cheaper so I bought more calls for less money. I'm looking into BAC calls for August or October but I think I want more stability. I don't know why but I always felt that F was not going to move....but I also thought that when they were like $1.20 lol. [/QB][/QUOTE]
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