New Trade – double calendar call spread

Stock / Symbol: [private_monthly]Microsoft / MSFT[/private_monthly]

Option Strategy: double calendar
Price at trade post: $24.68

Reasoning: [private_monthly]MSFT[/private_monthly] is a great stock to sell options against because it doesn't move all that much. We're going with a double calendar call spread because it gives us a fairly wide range for the stock to be in for the trade to be profitable. We're selling weekly options that expire this Friday. Just in case the trade goes against us, we're using April 2012 options to give us plenty of time to work through the trade.

Max Risk: $756
Max Reward: $65 or 8.6% by Aug 26th
Profit Range: $23.96 - $25.41
Max Profit at: $25

Trade Details:

BTO 2 MSFT Apr12 24 Calls
STO -2 MSFT AugWk4 24 Calls

BTO 2 MSFT Apr12 25 Calls
STO -2 MSFT AugWk4 25 Calls

for a net debit of $3.78 per contract


Cost/Proceeds $756.00
Option Requirement $0.00
Total Requirements $756.00
Estimated Commission $12.95


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