Stock / Symbol: [private_monthly]Walmart / WMT [/private_monthly]
Price at trade post: $53.05
Option Strategy: calendar call spread
Max Risk: $468
Max Reward: $698 or 147% by May 2011 expiration
Profit Range: $52.10 - $58.60
Max Profit at: $55
Uncalled Return: 26%
Reasoning: This best of breed retailer has taken a beating since reaching its 52 week high in late January. Also, compared with a number of other major retailers, this stock is one of the few that's trading under its fundamental value. If the stock is trading under $55 by May expiration, we'll have taken in an uncalled return of 26% and we'll then look to sell the June calls.
Trade Details:
[private_monthly]
BTO 6 WMT Sep11 55 Calls
STO -6 WMT May11 55 Calls
for a net debit of $0.78 per contract
Requirements
Cost/Proceeds $468.00
Option Requirement $0.00
Total Requirements $468.00
Estimated Commission $15.00
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Chart:
[private_monthly]
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