Stock / Symbol: [private_monthly]Walt Disney Co / DIS[/private_monthly]
Price at trade post: $39.65
Option Strategy: diagonal call spread
Reasoning: [private_monthly]DIS[/private_monthly] has very strong fundamentals and is currently trading in the low end of it's trading cycle, giving it nice upside from here. If the stock closes under $42 by July expiration, we'll have taken in an uncalled return 9.7% and we'll then look to sell another near term call option.
Max Risk: $508
Max Reward: $277 or 54% by Jul 2011 expiration
Profit Range: $39.80 - $49.10
Max Profit at: $42 by Jul 2011 expiration
Uncalled Return: 9.7%
Trade Details:
[private_monthly]
BTO 2 DIS Jan12 40 Calls
STO -2 DIS Jul11 42 Calls
for a net debit of $2.54 per contract
As ususal, use a GTC limit order.
Requirements:
Cost/Proceeds $508.00
Option Requirement $0.00
Total Requirements $508.00
Estimated Commission $12.95
[/private_monthly]
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