Unprofitable: This trade is unprofitable if BIDU Closes under $128.50 or above $151.50 by February 17, 2012. The most I can lose on this trade is the amount the spread can be worth, $5.00 minus the amount I sold the spread for $1.50 for a total of $3.50.
Reason I like this Trade: I looked at the amount of movement that Bidu has had over the last 4 quarters and it has been very tight. The stock is implying a 7.1% move and it has only moved at most 5% on any earnings. I want to sell movement, but always define my risk vs reward. I am risking $350 per 1 lot to make $150, but I think it is great risk vs reward.
UPDATE 2.17.2012 With BIDU selling off, but staying above $130 this trade will be worthless after today. No trade is profitable until it is closed, so I will have to monitor it but looks like a BIG winner at #KOTM. This spread is worthless in an hour and a half, taking profits and moving to the next trade.
UPDATE 2.21.2012 This spread expired worthless, so it is on to the next trade, another winner at KOTM.