New Trade- MS: Looking to Take Advantage of a Tempered Opening in U.S. Banks

by Dan December 8, 2011 9:30 am • Commentary

As I stated in the “Morning Word”, DB is down about 2.00 in the pre-market on investors disappointment with ECB chief Draghi’s failure to instill confidence that the central bank will continue to buy European Sovereign debt.  MS has rallied over 30% in the last 2 weeks, I want to fade this move into next week’s expiration. 


BOUGHT:  MS ($17.33) Dec17th 16/15 Put Spread for up to .20

-Bought 1 Dec17th 16 Put for .38

-Sold 1 Dec17th 15 Put at .18

 Break-Even On Dec Expiration:

Profits btwn 15.80 and 15 make up to .80, max gain of .80 at 15.00 or lower

Loses btwn 15.80 and 16 lose up to .20 and max loss of .20 above 16