Stock / Symbol: [private_monthly]SalesForce.com / CRM [/private_monthly]
Price at trade post: $116
Option Strategy: put spread
Max Risk: $645
Max Reward: $850 or 135% by Nov 2011 exp
Profit Range: $0 - $113 by Nov 2011 exp
Max Profit at: $0 - $110
Suggest Upside Stop: $137.10
Reasoning: [private_monthly]CRM[/private_monthly] is a high flying stock trading at a PE ratio of 572. With a fundamental per share valuation of just $11.95 a share, we're going to trade for a further move down on this stock with a put spread. Our price target is $110 by Nov 18th.
Trade Details:
[private_monthly]
BTO 3 CRM Nov11 115 Puts
STO -3 CRM Nov11 110 Puts
for a net debit of $2.15 per contract
Requirements:
Cost/Proceeds $645.00
Option Requirement $0.00
Total Requirements $645.00
Estimated Commission $12.95
[/private_monthly]
[/private_monthly]
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