Stock Symbol: [private_monthly]T[/private_monthly]
Option Strategy: Put Spread
Price at time of Trade: $27.44
Target Price: $25
Option Strategy: Put Spread
Risk Level: moderate
Max Risk: $645
Max Reward: $855
Reasoning: We expect this stock to drop to at least $25 a share from it's current price. Last week, while the market was rallying, this stock spent the last 3 days of the week going nowhere. Fundamentally, we think there's a chance that[private_monthly] Apple announces that they're going to also get the iPhone on another major wireless network.[/private_monthly] This strategy limits our risk by reducing the amount of capital required for the trade and helps to reduce the effect of volatility of the option premiums.
Trade Details:
[private_monthly]
STO -5 T JAN11 25 PUT @ $0.82 ($410.00)
BTO 5 T JAN11 28 PUT @ $2.11 $1,055.00
Requirements:
Cost/Proceeds $645.00
Option Requirement $0.00
Total Requirements $645.00
Estimated Commission $12.95
[/private_monthly]
Chart:
[private_monthly]
[/private_monthly]
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