Tuesday, July 12, 2011

Trade of the Day: Broadcom (BRCM) August $35/$30 bull reversal trades

The Trade
A trader set up the BRCM August $35/$30 bull risk reversal for a $0.38 debit, or $87,400.

The trader is making a large bullish short term bet on Broadcom. The spread has unlimited risk to zero and unlimited profit potential to the upside. BRCM closed trading today at $33.34. The break even underlying price by August expiration is $35.38.

The white line shown in the daily chart is the break even price. The trader is willing to be put the stock at $30. BRCM traded 32,380 option contracts compared to average daily volume of 20,172.


*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.

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