Associate Jim
Trade: Buying 40 FDO Oct 60- 57.5 Put Spread for $0.25
Risk: $25 per 1 lot
Reward: $225 per 1 lot
Breakeven: $59.75
Notes: The stock has sold off hard twice in the past four quarters both after beating estimates. The stock has been rallying but I think it will test lower after earnings.
Associate Alex
Trade: Buying 4FDO strangle swap by buying the Nov 62.50 Put – 67.50 Call strangle and selling the Oct 62.50 Put – 67.50 Call strangle for a net debit of $2.45
Risk: $245 per 1 lot
Reward: Unlimited
Notes: I expect the stock to stay within the strangle till October expiration, making the strangle worthless, and then to continue the direction further into November.
Alex has a master’s in economics from Suffolk U.
Jim has B.S. in finance from University of Illinois Champaign-Urbana.