You’re long four December 400-410 call spreads in a 1:2 ratio. Our cost basis is about $50 per spread, or $200 for the entire position, as a result of some partial profit-taking done on the way up. Some subscribers could also be holding four December 415 calls purchased for 0.06 or less. If so, the resulting butterfly spread would offer protection in the highly unlikely event that some fabulous news item sends the stock soaring $50 or more between now and Friday’s expiration. We’ll make no further adjustment to the position unless the stock rallies by Wednesday to $390 or higher, since all we’re looking to do is hold a very leveraged bet on an expiration-week explosion. So far, it would seem, the opposite seems likely — as though every Tom, Dick and Harry is already loaded to the gills with December out-of-the-money calls. _______ UPDATE (December 17, 12:08 p.m. EST): R.I.P., December out-of-the-moneys. (This is notwithstanding yesterday’s $11 surge — too late, unfortunately, to do us much good.) We’ll book a $200 loss and move on.
