Stock Symbol: [private_monthly]CSTR[/private_monthly]
Price at Trade Initiation: $41.50
Option Strategy: diagonal call spread
Reasoning: [private_monthly]Coinstar - CSTR[/private_monthly] has performed nicely for us. However, today's big move up has changed things. If [private_monthly]CSTR[/private_monthly] looked to close just at the money, we were thinking we'd close out the short 45 strike call for a 12% yield and then sell a NOV out of the money call. But with today's big move up, we're going to wait until the last hour of trading today. If it looks like [private_monthly]CSTR[/private_monthly] will close between $45 - $45.35, we're going to buy back the short 45 strike call, and then sell an out of the money NOV strike call. However, if the stock looks to close over $45.35, we're going to just close the position for around a 33% gain.
Max Risk: $625
Max Rewward: $238
Max Profit achieved at: $45.00 by Oct 15th = 38% gain
Current Position:
[private_monthly]
-1 CSTR OCT10 45 CALL $0.85 (cost basis) - $0.90 (current value)
1 CSTR APR11 40 CALL $7.10 (cost basis) - $9.29 (current value)
[/private_monthly]
Current Gain / Loss: $205
Current Gain/Loss %: 33%
Chart:[private_monthly]
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