Stock / Symbol: [private_monthly]Baidu / BIDU[/private_monthly]
Price at time of post: $113.09
Option Strategy: calendar call spread
Max Risk: $520
Max Reward: $318 (at Nov expiration)
Max Called Return: 61%
Uncalled Return: 43%
Profit Range: $107.96 - 123.54 ( at Nov expiration)
Max Profit at: $115
Reasoning: This stock has strong fundamentals and we expect it to continue to move higher. In case the stock pulls back in the near term, we're going with a Calendar Spread. In the event of a pull back, the Calendar Spread lowers our cost basis on our long call from $9.15 down to $5.20, giving us an uncalled return of 43%.
Trade Details:[private_monthly]
Buy 1 BIDU Jan11 115 Call @ $9.15 = $915.00
Sell -1 BIDU Nov10 115 Call @ $3.95 = ($395.00) Credit
Requirements:
Cost/Proceeds $520.00
Option Requirement $0.00
Total Requirements $520.00
Estimated Commission $12.95
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