Stock / Symbol: [private_monthly]Ford / F [/private_monthly]
Price at trade post: $14.99
Option Strategy: diagonal call spread
Reasoning: With [private_monthly]Ford [/private_monthly] trading 21% under its recent high, and with it finding support at its 200 day average, we're going to go long this stock here. The fundamentals also imply a valuation of $28 per share. If [private_monthly] F [/private_monthly] is trading under $16 by April expiration, we'll look to sell the May calls against the position
Max Risk: $716
Max Reward: $391 or 54% by Apr expiration
Profit Range: $14.55 + by Apr expiration
Max Profit at: $16
Uncalled Return: 17%
Trade Details:
[private_monthly]
Buy 4 F Sep11 14 Calls @ $2.16 for $864.00
Sell -4 F Apr11 16 Calls @ $0.37 for ($148.00)
for a net debit of $1.79 per contract
Requirements:
Cost/Proceeds $716.00
Option Requirement $0.00
Total Requirements $716.00
Estimated Commission $12.95
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Chart:
[private_monthly]
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