Break-even: I break-even on this trade if JCP closes at $33.70 by May 18, 2012.
Unprofitable: This trade is unprofitable if JCP closes under $33.70 by May 18, 2012. The most I can the amount either spread can be worth $1.00 minus the amount I sold it for $.30 for a total of $.70.
Reason I Like This Trade: I wanted to take advantage of the fact that a customer bought 10,000 JCP May 38 Calls for $.91. I thought this was the prefect time to get LONG, but I always want to define my risk vs reward and would prefer not to buy premium in this environment, so I sold a Put Spread.
UPDATE 4.4.2012: Even with the huge sell-off in equities, I am sticking with this trade. It is currently worth $0.32 for a small losing position.
UPDATE 4.9.2012: With JCP selling off hard, this Spread is currently worth $.45. I think the stock can rally higher, and I guess this was another Call Buyer to get Short the stock. I will leave this spread on until earnings
UPDATE 4.16.2012: This Put Spread is currently worth $.49 and with the market uncertain, I might look to take this trade off right before earnings, but not until it.
UPDATE 4.23.2012 This Put Spread is worth $.60 and since it LONG premium I would take it off here.
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