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Hi Advanced Traders!

Just like last week, I am pairing bear call spreads to my covered calls and selling calls against my LEAPS. If you set up some bear call spreads or converted your LEAPS into a temporary PMCC in the previous weeks, you can consider closing them out and restarting new ones with further expiration dates. We are essentially buying back and rolling out (BBRO) our trades.

This week, I will be setting some up on AMD and AAPL.

AMD BCS:

Expiration Date: May 27, 2022

Step 1: Buy 1 $150 call option (delta 0.02) for $15.

Step 2: Sell 1 $125 call option (delta 0.07) for $50.

Step 3: Set up a buy-stop order of 100 shares for $124 per share

Credit: $50 - $15 = $35

The goal is to have AMD stay below $124 from now until May 27. If it does, both legs will expire worthless and you will be able to keep $35. I know $35 isn't much, but I am being cautious since we are nearing earnings and AMD can quickly pop up if the markets react favorably.

If AMD rallies up to $125, you will buy 100 shares for $124 each, convert your bear call spread into a covered call, and sell your first leg.

AAPL BCS:

Expiration Date: May 27, 2022

Step 1: Buy 1 $205 call option (delta 0.02) for $17.

Step 2: Sell 1 $185 call option (delta 0.13) for $89.

Step 3: Set up a buy-stop order of 100 shares for $184 per share

Credit: $89 - $17 = $72

The goal is to have AAPL stay below $184 from now until May 27. If it does, both legs will expire worthless and you will be able to keep $72.

If AAPL rallies up to $185, you will buy 100 shares for $184 each, convert your bear call spread into a covered call, and sell your first leg.

Remember that when I set these spreads up, I have the intent of buying 100 shares to cover my sold legs.

Like always, you can use these numbers as a guide and feel free to tweak the numbers to your own preference and risk-tolerance.

Have a great weekend!😀

Steve and the Call to Leap Team

Have a wonderful weekend! You got this!😀

-Steve and the Call to Leap Team

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