WPL
Looking for trades during work today and stumbled back onto WPL. WPL has broken out of its down trend on the 27th March 2007 and it seems to have pulled back to around $38.6 area and just hovering at that price for the past 1-2 weeks and creating a support level at this price .
The Trade
Sell April $38.0 Puts @ $0.32
Buy April $37.5 Puts @ $0.21
Expiry = 26/04/2007
Share/Contract = 1000
Max Profit = 0.11 (0.32-0.21)
Max Risk = 0.39 [(38.0-37.5) -Â (0.32-0.21)]
Return on Risk = 28.21%
Breakeven = $37.89
I opened 10 contracts:
Reward for trade (excluding fees) $1,100.0
Reward for trade (including fees) $890.6
Total Risk for trade $3,900.0
The above assumes that on 26th April 2007 WPL is trading at or above $38.0
(WPL closed today @ 38.88)
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