Aussie-scalper

BSL Bull Put spread - Aug expires with strikes 10.76/ 10.51

ASX:XMJ   S&P/ASX 200 MATERIALS

technical reasons - there seems to be a recover in price by rallying past previous low, and after completing corrective legs
fundamental - Goldman Sachs have a BUY rating with target of $14.95 over 12 months ( +37%)
good probability of this credit spread- with 5 weeks until expiry there is 'time-decay' on side
- the implied volatility is high for the past 30 days in upper range 42-47%
- European style option cannot be exercised before expiry date
- plenty of time to manage on table risk eg. 27/02 payoff diagram shows only -$250 if price down to 10.81, with reward of $1000 this is a good Risk reward if exit in two weeks
- Price merely has to stay above the upper sold strike of 10.76 to win
- if price rallies a lot can exit the trade for a substantial profit early
- if price drops a lot, at a few weeks before expiry can roll down and out to recover loss next month
- if decide to own the stock, its better to wait until after dividend payment in September as no tax imputations allowable and best not to have an options trade on during this time.....

Trade to make a living,
Not a fortune...

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