[Opening Bearish Call Credit Spread on Kohl's (KSS)]
Dear Member:
Kohl's (KSS) is taking a dive today and is currently down almost $1.50 at $72.14 and has a resistance around $74. I am placing an order to open a bearish call spread by simultaneously selling the Mar 75 calls (KSSCO) and buying the protective Mar 80 calls (KSSCP) for a limit of a $0.70 credit. If filled, I would receive a credit of 70 cents a share and have a risk (if no adjustments are made) of $4.30 per share. The trade could, therefore, result in a return on risk of about 16% for 22 days. I would reevaluate in the event the stock went above $74.
DISCLOSURE: At the time of publication, I have no position in KSS or any of its options.
Sincerely,
Bill Kraft
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