Stock / Symbol: [private_monthly]Pepsi / PEP [/private_monthly]
Price at trade post: $64.67
Option Strategy: calendar call spread
Max Risk: $498
Max Reward: $859 or 172% by Apr 2011 expiration
Profit Range: $63.75 - $72 by Apr 2011 expiration
Max Profit at: $67.50 (on Apr 15th)
Reasoning: This company has good fundamentals and looks to have recently recovered from a pull back. This is a long term secular growth story. If the stock is not trading above $67.50 by April expiration, we'll look to sell the May 67.50 strike call.
Trade Details:
[private_monthly]
Buy 6 PEP Jul11 67.5 Call $1.05 $630.00
Sell -6 PEP Apr11 67.5 Call $0.22 ($132.00)
for a net debit of $0.83 per contract
Requirements:
Cost/Proceeds $498.00
Option Requirement $0.00
Total Requirements $498.00
Estimated Commission $15.00
[/private_monthly]
Chart:
[private_monthly]
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