Unprofitable: I lose money on this trade if PAYX closes above $32.50 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 $.50 for a total of $.50.
Risk: $50 per 1 lot
Reward: $50 per 1 lot
Chart: Bearish overall has seen selling pressure above this level, the $32.50 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 1.5% on earnings. It is currently implying a 4.4% move tonight.
UPDATE 7.2.2012 I took half of my position off on Thursday at $.10 and I was looking to take the other half off at $.05 but never got filled. I will leave the other half of my position on until expiration.
UPDATE 7.5.2012 This Spread is still worth $.10, but I am leaving it on until expiration.
UPDATE 7.9.2012 This Spread is worth $.05 and I am looking to take it off and move to the next trade.
UPDATE 7.21.2012 Quite the rally in PAYX on expiration week, making the Spread that I sold worth $.45. Good thing I took half off my Spread off at $.10, taking small profits and moving on.