Stock / Symbol: Chipotle Mexican Grill / CMG
Price at trade post: $433
Option Strategy: [private_monthly]iron condor[/private_monthly]
Reasoning: With CMG set to report earnings this evening, we're expecting at least a [private_monthly]5% move in either direction. We looked at playing a double butterfly (AprWk4 430/435/440 & 425/430/435) but didn't like the risk / reward ratio (risk $450 to make $50), so we decided on a debit iron condor. With this structure, we need just a 5% move down or 4% move up to reach full profitability. If we don't get much of a move, we'll close the trade tomorrow to limit losses.[/private_monthly]
Trade Details:
[private_monthly]
BTO 1 AprWk4 445 call
STO -1 AprWk4 450 call
BTO 1 AprWk4 420 put
STO -1 AprWk4 415 put
for a max net debit of $3.75 per contract (current bid $2.30 / ask $4.40) (day order, limit order)
Requirements:
Cost/Proceeds $375
Option Requirement $0.00
Total Requirements $375
Estimated Commission $12.95
[/private_monthly]
Max Risk: $375
Max Reward: $125 or 33% by Apr 27
Profit Range: $0 to $415 and $450+ by Apr 27
Suggested Stop @: between $420 and $445 on/after Apr 20
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