Trade Adjustment : MO calendar spread

Stock / Symbol: [private_monthly]Altria Group / MO [/private_monthly]

Option Strategy: calendar call spread
Price at trade entry: $28.39
Price at this post: $28.75

Reasoning: With MO trading right at our upside breakeven point, we're going to [private_monthly]add some Jun12 28 calls[/private_monthly] to smooth out the delta on this trade and limit our losses should the stock continue higher. This adjustment will reduce our max profit from $280 down to around $200.

Trade Adjustment:

BTO 2 MO Jun12 28 Calls
for a debit of $1.67 per contract

Max Risk: $864 (increased from $530)
Max Reward: $200 or 23% by Dec 16
Max Profit at: $28 on Dec 16
Profit Range: $27.50 - $28.70


Non-members, click here for access

Speak Your Mind