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QBE has had a great run since 2001, more recently there was a dividend payout then the stock rallied for the past 1-2 months. Today there was a pull back to a low of $32, which has a strong level of support. There is support levels at $31.50 from 30th Jan 2006, so writing a bull put spread at this level is a great opportunity to get some free money (also some good premium)

The Trade
Sell May $31.5 Puts @ $0.515
Buy May $31.0 Puts @ $0.375

Expiry = 25/05/2007
Share/Contract = 1000
Max Profit = 0.14 (0.515-0.375)
Max Risk = 0.36[(31.5-31.0) - (0.515-0.375)]
Return on Risk = 38.88%
Breakeven = $31.36

I opened 10 contracts:
Reward for trade (excluding fees) $1,400.0
Reward for trade (including fees) $1190.6
Total Risk for trade $3,600.0

The above assumes that on 25th May 2007 QBE is trading at or above $31.50
(WPL closed today @ 32.26)

 Just a quick summary of my credit spread positions:
WPL (APR) 38/37.5: Closed @ 38.94 (this position is safe)
SGB (APR) 34/33.5: Closed @ 35.90 (this position is really safe)
OXR (APR) 3/2.75: Closed @ 3.05 (this position is safe, paid dividend and strong support levels @ $3)
QBE (MAY) 31.5/30: Closed @ 32.26 (this position is safe)

If everything goes well for the 26th April 2007, I’ll be collecting $5,690 from selling insurance premium for April (risking less than $15,000)