Andrew Keene, of www.keeneonthemarket.com, offers up his Trade Of The Day:
Trade of the Day (LEN) 6.26.2012
Trade of the Day: Selling the LEN July 28-29 Call Spread for $.39
Profitable: I make money on this trade if LEN closes under $28.39 on July 20 , 2012.
Break-even: I break-even on this trade if LEN closes at $28.39 on July 20, 2012.
Unprofitable: I lose money on this trade if LEN closes above $28.39 July 20 on, 2012. The most I can lose on this trade is the amount the Spread can be worth $1 minus the price I sold it for $.39 for a total of $.61.
Risk: $61 per 1 lot
Reward: $39 per 1 lot
Chart: Bearish overall has seen selling pressure above this level
Notes: I am playing to the downside and I will make money on this trade if the stock goes down, flat, or up less than 8% on earnings. It is currently implying a 11% move tonight.
Read more about options by www.keeneonthemarket.com
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