Trade Adjustment – diagonal call spread

Stock / Symbol: [private_monthly]Broadcom / BRCM [/private_monthly]
Option Strategy: diagonal call spread
Trade entry date: Feb 24
Price at trade entry: $40.56
Price at this adjustment: $38.12

Adjustment: With most of the premium out of the May calls we sold for $1.24 per contract, we're going to buy them back here for an uncalled return of 19%. We'll look to sell calls again when the stock rebounds. Additionally, as [private_monthly]BRCM[/private_monthly] is set to report earnings on Apr 26th, we're going to add a protective put.

Trade Details:
[private_monthly]

BTC -2 BRCM May11 45 Calls
for a net debit of $0.13 per contract

then
BTO 2 BRCM May11 35 Puts
for a net debit of $0.62 per contract

[/private_monthly]

Max Risk: $1080 (adjusted from $934)
Max Reward: unlimited (admusted from $579 or 62% by May 2011 expiration)
Profit Range: $0 - $30.59 & $41.08 +

Chart:
[private_monthly]

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[/private_monthly]
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