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

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  • Melissa Lee

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

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