Stock / Symbol: [private_monthly]Fifth Third Bancorp / FITB[/private_monthly]
Price at trade post: $14.04
Option Strategy: diagonal call spread
Max Risk: $744
Max Reward: $260 or 35% by May 2011 expiration
Profit Range: $14.13 +
Max Profit at: $15 by May expiration
Uncalled Return: 11%
Reasoning: The financial stocks have taken a beating as of late and it looks to us like the sector has more upside than downside at the point. This particular stock we chose for this trade has strong fundamentals ($20+ per share valuation) and we like the way its chart looks. If the stock is trading under $15 by May 20th, we'll have taken in an uncalled return of 11% and we'll then look to sell some June calls agains the position.
Trade Details:
[private_monthly]
BTO 4 FITB Nov11 13 Calls
STO -4 FITB May11 15 Calls
for a net debit of $1.85 per contract
Requirements:
Cost/Proceeds: $744.00
Option Requirement: $0.00
Total Requirements: $744.00
Estimated Commission $12.95
Chart:
[private_monthly]
[/private_monthly]
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