Stock / Symbol: [private_monthly]Microsoft / MSFT[/private_monthly]
Price at trade post: $24.71
Option Strategy: bull put spread
Reasoning: At a fundamental valuation of $35, we think that [private_monthly]MSFT[/private_monthly] is quite oversold. We're going with a bull put spread, which we'll open for a credit. This trade has a 65% probability of success and gives us a break even point that is about 3.7% lower than the stock's current price. We suggest you strictly adhere to a stop at $24 to limit downside risk.
Max Risk: $567
Max Reward: $133 or 22% by Dec 16
Profit Range: $23.82 +
Max Profit at: $24 +
Suggested Downside Stop @: $24
Trade Details:
[private_monthly]
STO -7 MSFT Dec11 24 puts
BTO 7 MSFT Dec11 23 puts
for a net credit of $0.19 per contract (GTC, limit order)
Requirements:
Cost/Proceeds ($133.00)
Option Requirement $700.00
Total Requirements $567.00
Estimated Commission $17.50
[/private_monthly]
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