Today I would like to make a suggestion on a short term debit spread.
The stock is the CME Group Inc. (CME).
CME is trading around $166.72 as I write this.
I am going to suggest you trade the weekly calls that expire on July 17th.
Because I am not suggesting buying a lot of time, I am going to suggest the debit spread structure.
The idea is that we are looking for CME to follow through from the strong reversal yesterday.
Here is the trade:
Buy to Open July 17 - $167.50 call for $3.50
Sell to Open July 17 - $172.50 call for $1.50.
The net debit will be $2.00 per spread.
Limit the trade to 5 spreads or 1% of the nominal portfolio.
The maximum gain on the position will be $300 per spread or 150%.
