Wednesday, May 11, 2011
Trade of the Day: EnCana October $34/$27 bull risk reversal 10,000x
A trader put on the October $34/$27 risk reversal for 10,000 contracts at a $0.90 debit.
The trader is making a large bullish bet on EnCana Corporation. The trader will profit if the underlying stock is above $34.90 by October expiration. The risk reversal has unlimited risk to zero but has unlimited profit potential to the upside. The trader decided to sell the October $27 puts to partially finance the purchase of the $24 calls. EnCana closed today at $32.59.
The 52-week range is a low of $26.02 and a high of $35.25.
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.