Stock / Symbol: [private_monthly]Whole Foods Market / WFM [/private_monthly]
Price at trade post: $60.13
Option Strategy: call spread
Reasoning: [private_monthly]WFM[/private_monthly] is showing signs of life after recently encroaching upon its 200 day moving average @ 52.42. While the stock has given back 1.75% (at the time of this trade) of its recent run-up, we'll chalk that up to profit taking at the end of a strong week of performance which was triggered by a handful of positive datapoints, including the company announcing an upbeat sales view and the possibility of opening 1000 addtional stores. We typically risk about 6 - 7% of the portfolio on a single trade but we're going risk risk about 10% here as this trade has a 75% probability of success / the stock can drop 13% and we still break even. We're going to look to exit the trade on Aug 3rd, as this co reports earnings that afternoon.
Max Risk: $1075
Max Reward: $175 or 16% by Aug 19th
Profit Range: $52.15 + by Aug 19th
Max Profit at: $52.50 + by Aug 19th
Trade Details:
[private_monthly]
BTO 5 WFM Aug11 50 Calls
STO -5 WFM Aug11 52.5 Calls
for a net debit of $2.15 per contract (GTC / limit order)
Requirements:
Cost/Proceeds $1,075.00
Option Requirement $0.00
Total Requirements $1,075.00
Estimated Commission $12.95
[/private_monthly]
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