We were hoping again this month that we’d be able to roll out the short options in our EEM calendar spread instead of closing the position entirely. But between the sour mood on Wall Street, a lot of economic data coming out next week, and second-quarter earnings announcements picking up, trading is likely to be even more volatile than in a “normal” expiration week.
Bearing in mind that good risk management is essential, we’re closing our entire position, as follows:
Day limit order
Sell to close 4 EEM Sept 130 put
Buy to close 4 EEM July 130 put
for a net credit of $5.05 or better.
Again, four contracts per leg represents all of our current position. Our net loss on this trade will be 9.42%.