Closing Bull Call Vertical SMG, Nearly Max Profit
We are closing out our 90/95 bull call spread, earning a debit of 4.99 by selling the 90 Cs and buying back the 95 Cs. We have made a profit of 49.7/contract, with a maximum potential profit of 50. The potential possible gains of holding the position are nearly negligible, so we are taking the successful trade and closing it out now, to best preserve strong risk/reward characteristics.
Below, we've attached our methodology for why we took the position initially. We sat the vertical below the market, essentially betting on the market staying above a place it already was very far above. This is one of our favorite strats, and has proven profitable often, despite the natural consequence of having to risk an amount significantly larger than the potential reward.
-- Jan 20, '19 --
" We are bullish on both the technicals and fundamentals of SMG . The multinational corporation, known for its consumer fertilizers and pesticides and new expansion into hydroponic equipment for the marijuana industry, has been trading in an up-channel. 2019 Q2 earnings beat estimates, with EPS of $3.64 (.22 above forecasts) and a top line of $1.19 billion (greater than the estimated $1.16 billion). The biggest growth opportunity is in its Scotts' Hawthorne subsidiary, which provides various products (hydroponics, fertilizers and lighting systems) to the cannabis industry. "
Below, we've attached our methodology for why we took the position initially. We sat the vertical below the market, essentially betting on the market staying above a place it already was very far above. This is one of our favorite strats, and has proven profitable often, despite the natural consequence of having to risk an amount significantly larger than the potential reward.
-- Jan 20, '19 --
" We are bullish on both the technicals and fundamentals of SMG . The multinational corporation, known for its consumer fertilizers and pesticides and new expansion into hydroponic equipment for the marijuana industry, has been trading in an up-channel. 2019 Q2 earnings beat estimates, with EPS of $3.64 (.22 above forecasts) and a top line of $1.19 billion (greater than the estimated $1.16 billion). The biggest growth opportunity is in its Scotts' Hawthorne subsidiary, which provides various products (hydroponics, fertilizers and lighting systems) to the cannabis industry. "
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