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Tuesday, November 16, 2010

Codes for call selling action

Sell The Call account will be giving out color codes for where the trade is located. The colors are as follows:

Red - The stock has fallen to the stop. Sell The Call will close the trade for a loss and move on to the next trade.

Orange- This means that the trade has not produced a profit. The stock is in between the stop and the strike price but has yet to produce a profit. Also, the call time value might not have fallen enough to give the trade a profit. It could also be a combination of the two. This is an area where the account will be looking to either sell another call on the stock at expiration or close the trade for a loss and move on to the next trade.

Green - The trade is now profitable. This means that the call time value has shrunk enough to make the trade profitable, the stock has risen high enough to make the trade profitable, or a combination of the two have made the trade profitable. The account will have the ability to close the trade for a profit before expiration if desired and move on to the next trade.

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