Stock / Symbol: [private_monthly]Las Vegas Sands / LVS[/private_monthly]
Price at time of post: $41
Option Strategy: calendar call spread
Max Risk: $652
Max Reward: $295 (at Nov expiration)
Max Called Return: 45%
Uncalled Return: 40%
Profit Range: $37.91 - 45.17 ( at Nov expiration)
Max Profit at: $41
Reasoning: This stock has strong fundamentals and we expect it to continue to move higher long term. However, we are expecting a near term pullback. Therefore, we're going with a Calendar Spread. In the event of a pull back, the Calendar Spread lowers our cost basis on our long call from $5.50 down to $3.27, giving us an uncalled return of 40%.
Trade Details:[private_monthly]
Buy 2 LVS Mar11 41 Call @ $5.50 = $1,100.00
Sell -2 LVS Nov10 41 Call @ $2.23 = ($446.00) Credit
Requirements
Cost/Proceeds $654.00
Option Requirement $0.00
Total Requirements $654.00
Estimated Commission $12.95
[/private_monthly]
Chart:[private_monthly]
Flash Player 9 or higher is required to view the chart Click here to download Flash Player now
[/private_monthly]
Non-members, click here for access
Speak Your Mind