[Opening bullish credit spread on Avon Products (AVP)/Spread Order/Buying Oct 40 Puts (AVPVH) and simultaneously selling Oct 42.50 Puts (AVPVV)/Limit Net Credit $0.30 for the day]
Dear Member,
I am opening a credit spread on Avon Products (AVP). I am buying the Oct 40 Puts (AVPVH) and selling the Oct 42.50 Puts (AVPVV) for a net credit of $0.30. If filled I will be taking in $0.30 a share and will have a risk of $2.20. Before commissions that is a return on risk of 13.6% for 15 days if the stock simply stays above $42.50 by expiration. As an example, if I did 10 contracts, I would take in $300 before commissions and have $2200 at risk. As long as the stock remains above $42.50 by close of market on Oxtober 15th, I have nothing to do and keep the $300. The stock is currently at $43.56 and there is a support at $42.92. If the stock closes below support I will probably adjust.
DISCLOSURE: At the time of publication, I have no position in the underlying stock or the referenced options.
Sincerely,
Bill Kraft
CutLoss, Inc.
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