A friend of mine (online) often shares trades he makes. Here is an example: ROKU 1 OCT-16-20 155/Oct-16-20 160/Sep-18-20 Custom spread. 19.7 limit. This a call debit spread +1-1+1. What is he looking at in order to set this type of trade up, and why would you want to do it?
This is a 3-legged trade, so it’s not a spread. But this trade is missing information so it’s invalid and I don’t know what this is. What is the strike for September 18 expiry?
Oh sorry, Sept-18-20 155. That is my question why? How does this make money and why would you trade it?
Long the Sep 155C Long the Oct 155C Short the Oct 160C You can dissect it via the vert or the diagonal. He's in the Oct 55/60 bull spread and long a 55 Sep call. Why? I could see if he was hedging gamma against a 55 calendar or diagonal by going long the 55 calendar and a long 60C, but this trade as outlined is stupid.
I guess these are two trades mixed up, a spread and a call. And both bullish, so just bullish bets. Not sure what else to make of them...