Stock / Symbol: [private_monthly]Salesforce.Com / CRM[/private_monthly]
Price at trade opening: $110.07
Option Strategy: call back spread
Max Risk: $1,380 (at Jan expiration)
Max Reward: unlimited
Profit Range: $0 - $110 + $141.35 (at Jan expiration)
Price Target: $120 (on Nov 19th)
Reasoning: We're expecting a big move in the stock when they report earnings on November 18th. We'll look to close out the trade the day following their earnings release. According to our risk graph, our worst case scenario is that we're at about break even the day following earnings on a down move. If we get $120 after earnings, we'll be up around $285 (about a 20% gain) according to our risk graph.
Note: Our OptionWiz brokerage account is currently maxed out so we'll be just paper trading this one.
Trade Details:[private_monthly]
Sell -1 CRM Jan11 110 Call $9.60 ($960.00)
Buy 2 CRM Jan11 125 Call $4.20 $840.00
for a net credit of $1.20
Requirements:
Cost/Proceeds: ($120.00) net credit
Option Requirement: $1,500.00
Total Requirements: $1,380.00
Estimated Commission: $12.95
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Chart:[private_monthly]
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