Today we are applying a Bull Call spread on Westpac Banking Corp (WBC)
Analysis:
WBC is currently trading at $26.66
WBC has hit a level of support recently and bounced. On Friday it broke out of a pennant pattern and provided bullish entry signals. Today’s pullback we feel in large was mainly due to the Wentworth elections that occurred over the weekend.
WBC along with ANZ and NAB is going to be reporting early November and going ex-dividend soon after. The yields on these three banks are looking very attractive, and each year we often see a rise into the dividend.
We are expecting WBC to rise, but we want flexibility on the timing as we aren’t sure if the rise is going to come tomorrow or next week. In this case, we can use a Bull Call spread to take advantage of time decay and provide us the flexibility of waiting for the bullish move.
If you would like to learn how and when to use this strategy, and other strategies like it, then please contact us here at TradersCircle on 03 8080 5788. Alternately, you can download a free eBook off our website which runs through advanced strategies.