Stock / Symbol: [private_monthly]Altria Group / MO [/private_monthly]
Option Strategy: diagonal call spread
Date of trade entry: Feb 1
Price at trade entry: $23.61
Price at this adjustment: $25.40
Adjustment: The stock is doing great but our long call hasn't appreciated in value the way we expected it to. Therefore, in case [private_monthly]MO [/private_monthly] continues on its upward march, we're going to add an April 26 strike call.
Current Position:
[private_monthly]
Long 4 MO Jan12 22.5 Calls @ $1.82 (currently at $2.99)
Short-4 MO Mar11 24 Calls @ $0.27 (currently at $1.43)
for a net debit of $1.55 per contract
[/private_monthly]
Trade Adjustment:
[private_monthly]
Buy 4 MO Apr11 26 Calls @ $0.12 for $48.00
for a net debit of $0.12 per contract
Requirements:
Cost/Proceeds $48.00
Option Requirement $0.00
Total Requirements $48.00
Estimated Commission $12.95
[/private_monthly]
Max Risk: $668 (adjusted from $624)
Max Reward: unlimited but at $250 trading at $24 on Mar 18th (adjusted from $349 or 56% by Mar 2011 expiration)
Profit Range: $23 +
Chart:
[private_monthly]
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