Stock / Symbol: Walter Energy / WLT
Option Strategy: [private_monthly]butterfly call spread[/private_monthly]
Trade entry date: May 7
Price at trade entry: $63.30
Price at trade exit: $49.24
Position Details: [private_monthly]
Short -3 WLT May12 60 calls
Long 6 WLT May12 62.5 calls
Short -3 WLT May12 65 calls
for a net credit of $0.38 per contract
[/private_monthly]
Analysis: With WLT closing $49.24 on Friday, it was comfortably under our downside breakeven price of $60. We were able to allow the trade to expire worthless for the full 17% return.
Max Risk: $636
Max Reward: $114 or 17% by May 18
Profit Range: $0 - $60 and $65 + by May 18
Suggested stop: between $60.5 and $64.50 after May 15
Realized Profit / Loss : $114 (pre-commission)
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