Stock / Symbol: [private_monthly]Visa / V [/private_monthly]
Price at trade post: $67.91
Option Strategy: bull put spread
Max Risk: $764
Max Reward: $236 or 30% by Jan 2011 expiration
Profit Range: $64.41 +
Max Reward Price: $65 + at Jan 2011 expiration
Reasoning: We're taking advantage of increased volatility in this stock due to what we consider is an over reaction to the Fed's calls to cut debit card transaction fees. The fundamentals are still strong with this stock and it has an 65% probability of closing above our break even at $64.41 by January expiration
Trade Details:
[private_monthly]
Buy 4 V Jan11 62.5 Puts @ $0.89 for $356.00
Sell -4 V Jan11 65 Puts @ $1.48 for ($592.00)
for a net credit of $0.61 per contract
Requirements:
Cost/Proceeds ($236.00)
Option Requirement $1,000.00
Total Requirements $764.00
Estimated Commission $12.95
[/private_monthly]
Chart:
[private_monthly]
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