Stock / Symbol: [private_monthly]Priceline.com / PCLN[/private_monthly]
Price at trade post: $518.30
Option Strategy: butterfly put spread
Reasoning: We've going to take advantage of the volatility surrounding [private_monthly]PCLN's [/private_monthly] scheduled earnings release this Thursday after market close. This trade has a 78% probability of success and reaches full profit potential this Friday. To reach full profitability, we either need the stock trading at or under $115 or at or above $125 by market close this Friday. The spread between the bid / ask on this trade is huge so there's a good chance we won't get filled on this one. We're using a day limit order.
Max Risk: $920
Max Reward: $80 or 8.70% by Aug 5th
Profit Range: $0 - $515 & $525 +
Trade Details:[private_monthly]
STO -2 PCLN AugWk1 515 Puts
BTO 4 PCLN AugWk1 520 Puts
STO -2 PCLN AugWk1 525 Puts
for a net credit of $0.40 per contract (options expire 7/5, day order, limit order)
Requirements
Cost/Proceeds ($80.00)
Option Requirement $1,000.00
Total Requirements $920.00
Estimated Commission $12.95
[/private_monthly]
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