Stock / Symbol: [private_monthly]American Express / AXP [/private_monthly]
Price at trade post: $45.87
Option Strategy: calendar call spread w/ protective call
Reasoning: [private_monthly]AXP[/private_monthly] is fundamentally sound and has recently moved off of it's lows. We also like that this stock has traded in a pretty tight range for the past year and a half, making it an ideal calendar call spread candidate. We're also adding an additional leg to this trade to give us the ability to profit should the stock move higher than $46.80 by Aug expiration.
Max Risk: $860
Max Reward: $120 (14%) @ $45 or unlimited over $50 by Aug11 exp
Profit Range: $44 +
Trade Details:
[private_monthly]
BTO 2 AXP Jan12 45 Calls
STO -2 AXP Aug11 45 Calls
for a net debit of $3.33 per contract
then,
BTO 2 AXP Jan12 55 Calls
for a debit of $0.94 per contract
Requirements
Cost/Proceeds $860.00
Option Requirement $0.00
Total Requirements $860.00
Estimated Commission $38.85
[/private_monthly]
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