Stock Symbol: BG
Option Strategy: bull put spread
Date Entered: Oct 12th
Price at Trade Open: $60.82
Current Gain / Loss: +22.73%
Max Profit: $340
Max Return: 51.52%
Max Risk: $660
Profit Range: $58.30 +
Max Profit at: $60
Update: We still expect BG to close above $60 by options expiration this Friday but, just in case, we're setting a contingent sell order on the position to sell at Market if BG trades below $59.00. This way, if BG does pull back here, we still capture some profit and protect ourselves from any downside in the trade. If you're at all nervous here, you can of course simply close out the trade for a nice 22% profit. We, however, are going for the full 51.52% gain. What's neat about this bullish trade is that the stock is trading lower than our entry piont, yet we're at a profit. This is the beauty of selling options, taking advantage of the fact that 77% of all options expire worthless
Position Details:
Short -2 BG NOV10 60 PUT @ $2.91 ($582.00) Credit
Lont 2 BG NOV10 55 PUT @ $1.21 $242.00
for a net credit of $1.70 per contract or $340
Total Requirements $660.00
Chart:
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