An update on MCK earnings trade – trade management, exit strategy.

As I last posted (click here) on MCK the day after reporting when I closed three 3:2 spreads for $1.00 debit after initially getting a credit of $2.37 when putting them on.

I said that I was in no rush to take off the remaining spreads as they had become positive theta when the underlying moved down.

I’ve been patiently holding them with orders open to take off small positions at a time.  With time passing and MCK down a bit more, so far today two more 3:2 spreads have executed and closed for debits of $0.78 and $0.62. 

I still have four spreads open with orders to get out of them at $0.45 and $0.36.  I may move those orders up and get out of this trade by the end of the day today.  So far profit on this trade is $1768 including both open and closed positions.

The remaining contracts look like the Thinkorswim analyze tab below. As you can see there’s little profit potential left so I’ll look to be out by day’s end today. (click any picture to enlarge)

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