The first paper trade

So, Ken inspired some thinking yesterday. The sideways move on FCX . . . sounds very Aikido. Now, I still know nothing about the risk calculations and I wasn't going to have time to talk to a coach with the vacation planning, so I decided on trying my own hand using our paper money.

I did my research and found a very tempting scenario so, I'll spell out my paper move from yesterday here (for you to check), but I'm not going to count it in my ongoing portfolio updates.

So I did a little looking around and found two interesting spreads for Sept:


CALLS:
Strike @ 95 for .58
Strike @ 90 for 1.5

PUTS:
Strike @ 75 for 1.1
Strike @ 70 for .5

I traded 10 contracts in each. So, my exposure on the shares should be $5K (I can't lose both!!) with an immediate income of 1,520. This puts my maximum risk at 3,480. If everything pans out, I should net 4.08 per share on the CALLs and 4.4 per share on the PUTs. If my math is right, I have a potential return of 44%!!!

Check my math peeps . . . and my risk!