Stock / Symbol: [private_monthly]Wells Fargo / WFC [/private_monthly]
Option Strategy: [private_monthly]butterfly put spread[/private_monthly]
Reasoning: While WFC is fundamentally strong, we think that it take a bit of a breather before heading higher. Thinking that WFC will trade back to [private_monthly]$30 some time between now and Mar expiration, we're going to use a butterfly put spread. If need be, we may adjust the trade by adding a second butterfly if WFC looks to trade outside of our profit range.[/private_monthly]
Trade Details:
[private_monthly]
BTO 7 WFC Mar12 31 puts
STO -14 WFC Mar12 30 puts
BTO 7 WFC Mar12 29 puts
for a net debit of $0.23 per contract (GTC, limit order)
Requirements:
Cost/Proceeds $161.00
Option Requirement $0.00
Total Requirements $161.00
Estimated Commission $35
Max Risk: $161
Max Reward: $500 or 210% by Mar 16
Profit Range: $29.27 to $30.75
Max Profit at: $30
Suggested upside stop: $32
Suggested downside stop: $29
[/private_monthly]
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