Stock / Symbol: [private_monthly]Altria Group / MO [/private_monthly]
Price at trade post: $28.41
Option Strategy: calendar call spread
Reasoning: This company is another good candidate for a butterfly or calendar trade as it just doesn't move that much. Our trade is betting that by dec 16th, [private_monthly]MO[/private_monthly] will settle back down to $28. As soon as it hits $28, we'll see if we can close the trade early if we're up at least 12% on the trade. If the stock moves under $27 or over $29, we'll either close the position or adjust the trade to minimize losses.
Max Risk: $530
Max Reward: $280 or 53% by Dec 16
Max Profit at: $28 on Dec 16
Profit Range: $27.15 - $28.70
Trade Details:
[private_monthly]
BTO 10 MO Mar12 28 Calls
STO -10 MO Dec11 28 Calls
for a net debit of $0.53 per contract
Requirements:
Cost/Proceeds; $530.00
Option Requirement: $0.00
Total Requirements: $530.00
Estimated Commission: $25
[/private_monthly]
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