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mar29 -mike layed out the following trade on Dicks sporting goods:
buy the June 50 call for 1.45
sell the June 55 call for .35
total for call spread 1.10 debit
pretty straight forward, stock at 48 now, has a bullish thesis. needs to be at 51.10 at June opex to breakeven. max profit is 3.90.
includes an earnings release in there since its for JUNE.. just need to point out that if stock takes off near term above 55 you do not see that entire 3.90 in profit.. you will see some profit but that max profit is only at opex.
My alternative to this would be to price out a series of calender spreads since he is going way out to June. mike is only taking in .35 by selling that jun55 call. so instead i would look at:
buy the Jun50 call for 1.45
sell the Apr50 call for .30
with this im taking in almost the same amount as mikes jun55.. after APR opex is would then look at either selling a May 50 or 55 depending where stock is and then for June selling the 55 then.. depending on what happens with earnings.
i dont follow this stock at all to make either trade though.
"if you dont have an advantage, dont take the trade"
follow me on twitter @mark_lexus for more free charts , setups, and my trades
she shops at Dicks Sporting goods:
