Stock / Symbol: [private_monthly]Sprint / S [/private_monthly]
Price at trade post: $4.53
Option Strategy: bull put spread
Max Risk: $480 (at May expiration)
Max Reward: $270 or 56% with stock over $4.50 (at May expiration)
Profit Range: $4.33 + (at May expiration)
Reasoning: We have been monitoring the top U.S. Telecom carriers over the past year, and we believe that Sprint is showing signs of life. Having just reported better-than-expected subscriber additions in the fourth quarter for the first time in more than three years, and the fact that traction with the Droid operating system is picking up, we are bullish on Sprint. We also have a 77% probability on this trade as this is a credit spread.
Trade Details:[private_monthly]
Buy 15 S May11 4 Puts @ $0.14 for $210.00
Sell -15 S May11 4.5 Puts @ $0.32 for ($465.00)
for a net credit of $0.18 per contract
Requirements
Cost/Proceeds ($270.00)
Option Requirement $750.00
Total Requirements $480.00
Estimated Commission $37.50
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Chart:[private_monthly]
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