- Underlying: INTU
- View: Cautiously optimistic for a short-term bounce from oversold conditions, targeting a move towards key resistance.
- Strategy Type: Debit Spread / Directional Bullish
- Option Contract Portfolio:
- Buy 1x INTU 19 May 2026 $405 Call
- Sell 1x INTU 19 May 2026 $425 Call
- Max Gain & Loss: Max Gain = $1,600; Max Loss = $840 (Net Debit)
- Initial Cost/Credit: Debit of ~$8.40 per spread (using mid-prices: Buy $405C @ $15.55, Sell $425C @ $7.15)
- Greek Exposure (Simulated):
- Delta: +0.18 (Positive, bullish directional bias)
- Theta: -$0.09 (Slight negative time decay, mitigated by short leg)
- Vega: +$0.02 (Slightly positive, but minimal; strategy is largely vega-neutral)
- Gamma: ~0.01 (Low, as it's a spread)
- Rho: ~0.01 (Low sensitivity to interest rates)
- Rationale: This strategy is optimal for a "cautiously optimistic" view. It provides leveraged upside exposure to the anticipated bounce towards $425 resistance while strictly capping the maximum loss to the initial debit. It balances Delta (capturing directional move) and Theta (reducing time decay cost vs. a long call) effectively. The short $425 call helps finance the long call, lowering the breakeven point to ~$413.40. Profit is maximized if INTU closes at or above $425 at expiration. It is ideal in a medium-high IV environment as the cost of the long call is partially offset by selling a higher-strike call.
- Time Frame: Short to Medium Term (Approx. 4 weeks to May expiry)
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