Saturday, August 20, 2011

Bear Put Spread (22 Aug 11)

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).  

IYR  $52.99
Buy to Open (1) Sep 11 57 P @ $4.90
Sell to Open (1) Sep 11 52 P @ $2.04 
Net Debit: $2.86 ($286.00)
Breakeven: $54.14
Max. Profit: $214.00
Pct Return: 74.8% (27 days)

EWZ  $60.31
Buy to Open (1) Sep 11 65 P @ $5.75
Sell to Open (1) Sep 11 60 P @ $2.81 
Net Debit: $2.94 ($294.00)
Breakeven: $62.06
Max. Profit: $206.00
Pct Return: 70.1% (27 days)

EFA  $50.17
Buy to Open (1) Sep 11 55 P @ $5.35
Sell to Open (1) Sep 11 50 P @ $2.33 
Net Debit: $3.02 ($302.00)
Breakeven: $51.98
Max. Profit: $198.00
Pct Return: 65.6% (27 days)

FXI  $35.88
Buy to Open (1) Sep 11 39 P @ $3.55
Sell to Open (1) Sep 11 34 P @ $0.91 
Net Debit: $2.64 ($264.00)
Breakeven: $36.36
Max. Profit: $236.00
Pct Return: 89.4% (27 days)

USO  $32.12
Buy to Open (1) Sep 11 36 P @ $4.30
Sell to Open (1) Sep 11 31 P @ $1.29 
Net Debit: $3.01 ($301.00)
Breakeven: $32.99
Max. Profit: $199.00
Pct Return: 66.1% (27 days)

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

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