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.

Questions, comments send them to us at: optionsaction@cnbc.com

Latest Video


Host Bio

  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

Options Action Traders

From Our Sponsor

Options Action Newsletter:

Sign up to receive exclusive Options Action content. Each month you'll receive an exclusive message from host Melissa Lee and insight directly from one of the members of our Options Action panel. Keep your pulse on the market with the Options Action newsletter.

Please enter a valid email address
To learn more about how we use your information, please read our Privacy Policy.