Stock / Symbol: [private_monthly]Pan American Silver / PAAS [/private_monthly]
Price at trade post: $34.75
Option Strategy: diagonal call spread
Reasoning: We'd like some exposure to the precious metals market and feel this stock is a great way to play silver. Technically, the stock looks poised to move higher after finding support near its 200 day average. Fundamentally, this stock is trading at about par. If [private_monthly] PAAS[/private_monthly] is trading under $36 by April expiration, we'll look to sell the May calls against the position
Max Risk: $950
Max Reward: $485 or 51% by Apr expiration
Profit Range: $32.15 + by Apr expiration
Max Profit at: $36
Uncalled Return: 22%
Trade Details:
[private_monthly]
Buy 2 PAAS Oct11 33 Calls
Sell -2 PAAS Apr11 36 Calls
for a net debit of $4.75 per contract
Requirements:
Cost/Proceeds $950.00
Option Requirement $0.00
Total Requirements $950.00
Estimated Commission $12.95
[/private_monthly]
Chart:
[private_monthly]
Flash Player 9 or higher is required to view the chart Click here to download Flash Player now[/private_monthly]
Non-members, click here for access
Speak Your Mind