Monday, April 23, 2012

Trade Idea: VMW May 12 90/95 Credit Put Spreads

Market has been acting very shaky the past few weeks.  Not going to risk turning a profitable trade into a loss to save 50 bucks.  Could have rolled this one to June to recoup some of that, but I'd rather look for better setups.

BTC VMW May 12 95/90 put spreads for ($0.13-$0.03) x 100 x 5 spreads = $50 paid vs. $150 premium received = $100 profit against $2500 in margin used for 4% ROI

Little more follow-through today with stock kissing the 50-day sma.  Entered the trade as setup below.

Sold VMW May 12 95/90 put spreads for ($0.53-$0.23) x 100 x 5 spreads = $150 premium received

Following this setup on VMware Inc. (VMW) that @Mark_Lexus posted on his blog.

Stock pulled back after a 10% earnings beat last week, and following through today with the overall market down.  Hasn't quite tested the 50-day sma yet but is holding the rising trendline based on the December '11 low.  Also close to touching the lower range of the Bollinger band.  Keeping short strike below the 200-day sma at 95.

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