Stock / Symbol: Walgreen Co/ WAG
Option Strategy: calendar call spread
Trade entry date: Jun 7
Price at trade entry: $43.29
Price at this post: $41.70
Current position:
Long 3 WAG Oct11 44 Calls
Short -3 WAG Jul11 44 Calls
Reasoning: We're not pleased with how WAG has acted over the past week and so we're going to take profits here. If you'd rather not exit here, we'd suggest rolling the short July 44 calls into short Aug 44 calls. Making a 29% return on a long biased trade with the stock dropping 4% is a great example of the power of selling options!
Trade Details:
STC 3 WAG Oct11 44 Calls
BTC -3 WAG Jul11 44 Calls
for a net credit of $1.04 per contract (GTC, limit order)
Max Risk: $234 (adjusted down from $549)
Max Reward: $575 or 145% by Jul 2011 expiration
Profit Range: $39 - $50.55
Max Profit at: $44 by Jul 2011 expiration
Realized Reward upon fill: $67.92 or 29% (pre-commission)
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