Close the Axon Options for a 232% Gain in 3 months

aplus's picture

On February 19th we initiated a bullish option trade on Axon (AAXN) by purchasing 2 June $60 Calls, 3 June $65 Calls and selling 5 June $50 Puts short for a net cost of $3.50. Today these positions are worth $11.61 for a gain of $8.11 based on the position ratio of 2:3:5, and we're closing each of the 3 legs of this trade as detailed below. We see no issue with keeping the June $50 Puts for another 31 days until expiration, however any significant drop in the stock would erode the profit potential on this trade, and any bad earnings guidance could also pose a risk - which we see as being somewhat minimal. Nonetheless, we are closing this position since the bird in the hand is worth more than eeking out another $0.09 cents on those short puts expiring.

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