I purchased the 3 call options in TD on July 14. As a result of the rate cut, TD bank reduced its rate by 0.10%. This help to lift the stock price higher, as the reduction in the rate means its cheaper to borrow money which means more people or businesses will likely borrow more money and therefore the banks make more money. On July 16, the upward movement in the stock price meant the price of the option went up. My limit order was filled on July 16 at $1.70 per contract.
Initial cost: $1.20*3contracts*100shares/contract + $12.95
Proceeds of Sale: $1.70*3contracts*100shares/contract - $12.95
Profit = $497.05-$372.95
Total Return = $124.10/$372.95*100%
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So I made a 33.28% return in less than 48 hours.
Disclosure: own 100 shares of TD
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.
Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.