Unprofitable: I lose money on this trade if LEN closes above $28.39 July 20 on, 2012. The most I can lose on this trade is the amount the Spread can be worth $1 minus the price I sold it for $.39 for a total of $.61.
Risk: $61 per 1 lot
Reward: $39 per 1 lot
Chart: Bearish overall has seen selling pressure above this level
Notes: I am playing to the downside and I will make money on this trade if the stock goes down, flat, or up less than 8% on earnings. It is currently implying a 11% move tonight.
UPDATE 6.27.2012 The stock is rallying, but the volatility is collapsing and the Spread is now worth $.52. I will leave it on and hope LEN moves under the $28 level.
UPDATE 7.2.2012 This spread went rogue and is now worth $.85. Since it can only go to $1, I am not taking it off, but I am also not looking to add to it. Just sit and maybe LEN will sell-off until the end of July.
UPDATE 7.5.2012 This Spread is still worth $.85, but I will leave this trade on as I think the stock market could sell-off. I will be looking to take this trade off.
UPDATE 7.9.2012 This Spread is worth $.80 and if we continue to sell-off I will be looking to take this trade off for a small loser.
UPDATE 7.21.2012 The reason I like to sell Spreads is because I can always define my risk vs reward. In this trade I was willing to risk $.61 and that is what I ended up losing as the Stock spiked higher.
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