Bear Put Spread (18 Jul 11)

TO ALL:

Here are the “potential trades” for next week:

Bear Put Spread (ETFs)

A Bear Put spread is a debit spread created by purchasing a Put with a higher strike price and selling a Put with a lower strike price.  Both options expire in the same month.  This is a bearish strategy and should be implemented when you expect the market to close below the strike price of the short Put option—the point of maximum reward (at expiration).   

EEM $46.66

Buy to Open (1) Aug 11 50 P @ $3.45

Sell to Open (1) Aug 11 45 P @ $0.69 

Net Debit: $2.76 ($276.00)

Breakeven: $47.24

Max. Profit: $224.00

Pct Return: 81.2% (33 days)

All positions displayed are for educational purposes only and are not intended to be recommendations.