Monday, June 27, 2011

Trade of the Day: Eastman Kodak August $2.5/$3 bull put spread

The Trade
A trader executed the EK August $2.5/$3 bull put spread for a $0.14 credit, 4,090x.

The trader is making a large bullish bet on EK. The vertical spread has limited risk and limited profit potential. The trader received a credit of $57,260 for the spread, which is the max profit. The max risk occurs at an underlying stock level of $2.50 and below. The break even underlying price level is $2.86 by August expiration.

The white line shown in the daily stock chart is the break even price of the spread. EK closed trading today at $3.43.

EK traded 40,958 option contracts compared to average daily volume. The 52-week range for EK is a low of $2.75 and a high of $5.95. *Special thanks to Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow! 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.

No comments:

Post a Comment