Call Spread on YY on 9/11/2013

YY Inc. (YY) operates an online social platform in the People’s Republic of China. It is the Facebook of China!

It provides YY Client, a personal computer based user software that offers real-time access to user-created online social activities groups. The company also offers Web-based YY that enables users to conduct real-time interactions on the Web without any downloads or installations; and Mobile YY, a smartphone application. In addition, it operates Duowan.com, a game media Website that provides information on online games and other resources for users and online game players.

Shares have formed a bullish "cup & handle" and are in the process of moving higher out of this formation. Note that the firm had a great quarterly report.

52-Week Trading Range:  $10.50 - 49.82

Last Trade:  $46.70

Here is the trade: 

Buy One October $45 Call Option for $5.10

Sell One October $55 Call Option for $1.65

The payoff table is shown in the chart.

Trade Buy 1 October $45.00 Call at $5.10 Sell 1 October $55.00 Call at $1.70 For a net debit of $3.40 Profit/Loss Analysis Breakeven at $48.40 Maximum profit is $660.00 at strike of $55.00 Maximum loss is ($340.00) at strike of $45.00 Closing Summary Sold 1 October $45.00 Call at $7.50 Bought 1 October $55.00 Call at $2.40

Position closed on 9/19/2013 at price of $5.10 with a 50.00% gain in 7 days.

Updates

9/19/2013 10:06:02 AM

We are closing the YY position with great success.

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