Tuesday, March 27, 2012

Trade: Sold LULU Apr 67.5/65.0 Credit Put Spreads

Sold the Lululemon Athletica (LULU) 67.5/65.0 put spread for an $0.21 ($0.53 - $0.32) credit.  Stock has been pulling back for a few days but riding the 20-day sma (the center of the Bollinger band) since it beat earnings at the beginning of the yea, and again last week.  I'm shooting against the lower level of the band, which also lines up with the 50-day sma, and a few short-term tops for support.  Strike peg is currently at 71, but there is a bit of bias lower.  OptionsHouse puts the probability of achieving max profit at 87.7%.

Sold LULU Apr 12 67.5/65.0 put spreads for ($0.53-$0.32) x 100 x 4 spreads = $84 premium received

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