Option Sensei

When the ice thaws sales will bloom and shares should follow. Pent up demand and renewed confidence in homeownership sets up this company’s stock for renewal of a solid seasonal rally.

It’s a well-known investment maxim that risk is correlated to reward. But when it comes to options it seems people are often making claims to both consistently hitting singles while simultaneously being home run kings.

On Monday, we took a timely dip into a bullish position in oil through a diagonal calendar spread in the SPDR Energy Select (XLE) exchange traded fund. Shares of the Energy ETF jumped some 3% on Tuesday to $80 per share pushing the value of our spread position fully in-the-money and its value from $2.75 to $3.50 in a single day.