Monday, April 23, 2012

Trade: Sold CMG May 12 355/350 Credit Put Spread

Both sides expiring worthless today.  Keeping the full $310 profit.

Stock following through to the downside as the market continues to sell off today and lots of momo stocks falling.  Playing a range in CMG by selling call spreads to create an iron condor.  Doing this to hedge the put spreads somewhat against further weakness since only one side (if any) of an iron condor can be a loser.  Keeping the short strike above the pre-earnings top at 440.  OptionsHouse puts the probability of this trade being completely successful at 86.4%.

Sold CMG May 12 440/445 call spreads for ($1.64-$1.27) x 100 x 5 spreads = $185 premium received

Chipotle Mexican Grill (CMG) sold off after the market responded poorly to last week's earnings beat.  Continued selloff today with continued fears regarding China's weakness dragging the entire market down.  Stock made a nice bounce off the 50-day sma so I entered put spreads.  Giving this one plenty of room since there aren't many resistance lines between the current price of 411.50 and the short strike at 355.  Also planning for additional market weakness in the coming weeks.  Tried to get down below the 200-day sma but there just wasn't enough premium.  OptionsHouse says my probability of achieving max profit is at 88.6%.

Sold CMG May 12 355/350 put spreads for ($1.42-$1.17) x 100 x 5 spreads = $125 premium received

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