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New Trade: Bull Put Spread: DEC14 TEVA

Today I opened a new trade against TEVA. The stock recently triggered a break out from a longer term squeeze and both indicators I watch are pointing for an uptrend move. Both indicators (Bollinger bands and Keltner channel) provide me with 70% chance that the stock movement direction will follow indicator’s direction.

And because I built up some free cash I broke my rules here and opened this trade although I wanted to increase cash to 30% reserves. Now, I am about to start over. I must keep my trading platform closed for the next two months after a few of my trades expire which would increase my cash reserves.

Trade Detail

I placed a following order today which should execute tomorrow:

STO -1 TEVA Dec19 14 50/40 put @ 2.60 CREDIT

The spread looks like the following:

SELL 1 TEVA Dec19 2014 50 strike puts and
BUY 1 TEVA Dec19 2014 40 strike puts

for LIMIT @ 2.60 CREDIT


Max Profit $273 Max profit occurs if TEVA is above 50 on expiration day, which is December 19.
Max Loss $727 Max loss occurs if TEVA is below 40 on expiration day, which is December 19.




I hope you had a great day and wish you happy trading!


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