I would like to make a suggestion on a debit spread and the stock is Cerner Corp. (CERN).
CERN reported on July 29th with a small earnings beat, so we do have to be concerned with an upcoming earnings release.
CERN is trading around $72 as I write this.
My suggestion is to trade the September monthly options that expire on September 19th.
This gives the stock about two weeks to make a move.
Here is how you open the position:
Buy to Open September 19th - $72.50 Call for $1.75
Sell to Open September 19th - $77.70 Call for $0.40
The net debit will be $1.35 per spread.
Based on the tracking portfolio, I suggest you limit the trade to an 8 lot or 1% of the portfolio.
The maximum gain on a five lot would be $2,920.
Limit the risk because the options are slightly out of the money and I am suggesting the front month option series.