TRADE IDEA: XLF JUNE 21ST/FEB 15TH 21/24 UPWARD CALL DIAGONAL
Max Loss/Buying Power Effect on Setup: 2.18/contract
Max Profit on Setup: .82/contract
Break Even: 23.18 vs. 22.81 spot
Debit Paid to Spread Width Ratio: 72.7%
Notes: Here, I'm just shopping around for particularly weak sectors in which to put on assumption plays that will have plenty of time to work out and/or reduce cost basis in. Typically, I shoot for a break even at or below where the underlying is currently trading, but am settling for a <75% debit paid to spread width ratio with a less than ideal break even here than what I typically do. Consequently, I'm paying less at the door than I ordinarily would, but still have a shot at getting a 27.3% return on cap invested in the event price finishes below the short call.