Marco from Optionmaestro has several option ideas as the May options expiration winds down.
Bank of America (BAC), 7:4, Buy the June 10 Call and sell the June 12 Call. Total risk of $1.00 per share with a potential payoff of $2.00 a share (net of $1 per share or 100%) if BAC closes at or above $12 on June expiration. The current probability BAC will close at or above $12 by June expiration is 54.9% according to the options market.
Ford (F), 6:4, Buy the June 4 Call and sell the June 6 Call. The total risk of opening this position is $101 per contract with a potential of making $99 profit per contract or a 98% return if Ford closes at or above $6 on June expiration. The current options market is factoring in a 39.7% chance Ford will close at or above $6 on June expiration.
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