Time On Your Side
Last Friday, Dan Nathan did something that would make even the best alchemist green with envy: he turned time into money, and he did so using the calendar spread on Intel .
Thinking that Intel's earnings would not significantly move the stock, Dan sold the Jan 21-strike call for $0.35, and used the proceeds to buy the Feb 21-strike call for $0.60, net-net paying $0.25.
"The stock underperformed the implied move and is actually trading flat to off," said Nathan. "The stock will most likely stay pinned to that $21 level today as it is expiration."
His next move?
Buy back the Jan 21-strike call for $0.15 and sell the February 21-strike call for $0.60, collecting a tidy profit of $0.20.
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