Entered a Position on GM today

After discussing the financials (see last night post) of GM and Tesla I entered a modified Calendar Spread this morning. Just woke up and my girls already left for work. I rushed to the computer to see the market opening at 0730 MT. GM already moved by 2 Dollar. Well this was my fear, But thats ok.

What did I do?

• I bought a diagonal spread, which is an option strategy that involves buying a call option at $55.00 strike price for 18 JUN expiration and I sold a second call at $65.00 strike price for 12 MAR.
• This diagonal spread allows me to construct a trade that minimizes the effects of time decay, while also taking a bullish position.
• Also with Selling a CALL further out of the money, OTM, it generates a credit which reduces the overall cost of the spread.
• I bought 4 contracts and sold 4 contracts.
• I just see that I made a mistake. I sold a CALL with expiration on 12th of March instead of March 19th. That latter would have given a bigger credit that the one I actually bought. Well, well. 

STO 4 Contracts GM 12 MAR 2021, 65 CALL for $1.17 = + $  468.00, Credit

BTO 4 Contracts GM 18 JUN 2021,  55 CALL for $7.31 = - $2,924.00, Debit

                                                                                  Net = - $2,456.00, Debit

As long as GM stays above 55 Dollars and below 65 Dollars until 12th of March, I am fine. On 12th of March 2021 the short position, 12 MAR, 65 CALL will expire hopefully OTM. Then GM can breach the news headlines with all the news about their new catalysts and earnings. We will have two Earning Reports in that period until June 18th. 10th of February and May 5th, 2021. So there is a lot of great potential until early summer.

The potential of the trade

Fact is the Short position has to expire and then the long position of the trade can take off like a rocket.

What are the estimates?

Shares of General Motors (NYSE:GM) were trading higher on Monday, a day after the company touted its increased focus on electric vehicles (EVs) in a widely watched advertisement during the Super Bowl.

As of 2:30 p.m. EST, GM's shares were up about 3.7% from Friday's closing price.

https://www.youtube.com/watch?v=MjMhZKmHKGk

GM's Super Bowl ad featured actor Will Ferrell making a tongue-in-cheek challenge to Norway, the country that has the highest rate of electric vehicle adoption in the world. The ad was preceded by several days of teasers and hints on social media, which drew responses from, among others, Norwegian politicians and rival automakers. 

More broadly, GM is making a big bet on EVs and it wants the world to know. That Super Bowl ad was part of a new marketing campaign launched last month, called "Everybody In," which focuses on three themes:

• Accelerating the mainstream adoption of EVs.

• Touting GM's plans to spend $27 billion on electric vehicles and autonomous-driving technology, and to  launch 30 new electric vehicles around the world, both by the end of 2025.

• Highlighting the advantages of GM's Ultium electric-vehicle architecture and batteries.