Stock / Symbol: [private_monthly]Crocs / CROX [/private_monthly]
Price at trade post: $17.40
Option Strategy: call spread risk reversal
Reasoning: [private_monthly]CROX[/private_monthly] recently reported very good earnings numbers and the chart shows a solid up trend. Normally, bullish as we are on this stock, we'd likely just put on a call spread. However, given the stock's price point, we're also able to sell an out of the money put to finance the entire trade. IMPORTANT - if the stock is trading under $16 at close of trading on April 15th, we'll be required to purchase [private_monthly]CROX[/private_monthly] at $16 per share. As we'd happily own the stock at that level (7% lower than it's current price), we're adding the sale of the put to this position. If we do end up owning the stock, we'll then look to sell a May 16 strike call against the position.
Max Risk: $1600
Max Reward: $110 or 6.9%
Profit Range: $16 +
Max Profit at: $18 +
Trade Details:
[private_monthly]
Buy 1 CROX Apr11 17 Call
Sell -1 CROX Apr11 18 Call
Sell -1 CROX Apr11 16 Put
for a net of $0.00 per contract
Requirements
Cost/Proceeds ($0.00)
Option Requirement $1,600.00
Total Requirements $1,600.00
Estimated Commission $38.85
[/private_monthly]
Chart:
[private_monthly]
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