Stock Symbol: [private_monthly]ADBE[/private_monthly]
Price at this post: $26.44
Option Strategy: diagonal call spread
Max Risk: $960
Max Profit: @ $72 or 7.5% @ $25 by Nov exp
Profit Range: $24.50 + by Nov exp
Uncalled Return: 30%
Suggested Stop @: $22.50
Reasoning: With a technology rally under way, we are looking to take advantage of some early stage moves in the group. [private_monthly]ADBE[/private_monthly] is a core player in structuring and presenting content for the worldwide web. Technically, the stock has strong support at $23, and fundamentally the stock has a current value of $30.45. This particular trade structure gives us a breakeven point at $24.50, allowing for the stock to pullback nearly 7% and still capture a profit.
Trade Details:
[private_monthly]
BTO 2 ADBE Jan12 20 calls
STO -2 ADBE Nov11 25 calls
for a net debit of $4.80 per contract (GTC, limit order)
Requirements:
Cost/Proceeds $960.00
Option Requirement $0.00
Total Requirements $960.00
Estimated Commission $12.95
[/private_monthly]
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