Stock / Symbol: [private_monthly]Macys / M[/private_monthly]
Price at trade post: $23.62
Option Strategy: diagonal call spread
Max Risk: $626
Max Reward: $193 or 30% by Feb 2011 expiration
Profit Range: $23.62 +
Max Profit at: $25
Reasoning: In the face of a very ugly day in the market, [private_monthly]Macys[/private_monthly] Is up over 3%. This company has solid fundamentals and has bounced nicely off its 200 day average. If the stock is trading under $25 by February expiration, we'll have taken in a 10.57% uncalled return and will then look to sell a March call.
Trade Details:
[private_monthly]
Buy 2 M Aug11 22 Calls @ $3.50 for $700.00
Sell -2 M Feb11 25 Calls @ $0.37 for ($74.00)
for a net debit of $3.13 per contract
Requirements
Cost/Proceeds $626.00
Option Requirement $0.00
Total Requirements $626.00
Estimated Commission $12.95
[/private_monthly]
Chart:
[private_monthly]
[/private_monthly]
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