Trade Analysis – WAG bull put spread

Stock / Symbol: Walgreen / WAG
Option Strategy: bull put spread
Trade entered on: Nov 30th
Price at trade post: 34.73

Realized Profit: $92
Max Risk: $308
Realized Return: 29% (before commissions)
Profit Range: $33.77 +
Max Profit at: $34

Analysis: With WAG demonstrating solid support at the 200 day average and with Volatility high, we put on a bull call spread. We're only risked $308 on this trade as our brokerage account was nearly maxed out at the time. Normally, we would have put on 8 contracts to risk $618. At December expiration, WAG closed at $37.58, easily covering the $34 strike price of the put we sold, yielding us the maximum 29% return in an 18 day period.

Trade Details:

Buy 4 WAG Dec10 33 Puts @ $0.26
Sell -4 WAG Dec10 34 Puts @ $0.49
for a net credit of $0.23 per contract or $92

Cost/Proceeds ($92.00) Credit
Option Requirement $400.00
Total Requirements $308.00
Estimated Commission $12.95


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