Trade Adjustment : Long Call to Calendar Call Spread

Stock / Symbol: [private_monthly]Broadcom / BRCM [/private_monthly]
Original Option Strategy: diagonal call spread
Trade entry date: Feb 24
Price at trade entry: $40.56
Price at this adjustment: $34.81

Current Position:

Long 2 BRCM Jan12 40 Calls
at an effective cost basis of $4.82 per contract.

Adjustment: Ahead of [private_monthly]BRCM's[/private_monthly] earnings announcement this afternoon, we're going to sell some near term calls to further lower our cost basis. There is only a 9.5% probability that the stock will be trading at $40 by Aug expiration so we're willing to risk that we'll have to close out the trade for a small loss if the stock makes a monster move between now and Aug 19th.

Trade Details:

STO 2 BRCM Aug11 40 Calls
for a net credit of $0.20 per contract


Max Risk: $924 (adjusted from $964)

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