Stock / Symbol: The Hershey Co. / HSY
Option Strategy: [private_monthly]broken wing butterfly call spread[/private_monthly]
Price at trade post: $61.15
Reasoning: We're always looking for those "Steady Eddie" stocks that work very well for [private_monthly]butterfly and calendar spreads. We think that HSY is another good candidate. Since we're expecting a slight pullback to $60, and because the option strikes are just in 5 point increments, we're going with a broken wing butterfly designed to provide maximum yield at $60 and allow us to easily exit the trade should the stock continue up to the $62 level. We'll look to exit the trade once we're up about 10% - 12%. Since this trade is not easily adjusted, we suggest you closely adhere to our suggested stop levels.[/private_monthly]
Trade Details:[private_monthly]
BTO 2 HSY Apr12 55 Calls
STO -3 HSY Apr12 60 Calls
BTO 1 HSY Apr12 65 Call
for a max net debit of $8.15 per contract (try to get filled at $8.05 or better, GTC, limit order)
Requirements:
Cost/Proceeds $815
Option Requirement $0
Total Requirements $815
Estimated Commission $12.95
[/private_monthly]
Max Risk: $815
Max Reward: $150 or 18% by Apr 20
Profit Range: $59.10 to $61.80 on Apr 20
Max Profit at: $60
Suggested upside stop: $62.35
Suggested downside stop: $59.10
[/private_monthly]
Non-members, click here
Speak Your Mind