Trade Update: July 17, 2012
With GRPN having broken down from previous levels and July expiration fast approaching it’s probably a good time to take the final profits in this trade. We paid .70 for the trade initially and with the stock around 10 took half off at 1.60. With the stock at 7.45 the balance of the trade can now be taken off for 2.45-2.50ish. Best to take the money and run. We love structures like where we doubt the long term prospects of a stock and this one paid off being patient.
Trade Update: May 7, 2012
With GRPN having bounced a little off of the 10 level, we’re going to use the opportunity to take half of this trade off for more than a double. We’re selling half this spread at 1.60 and will let the other half ride in case GRPN breaks down below that 10 level. This way we’re still in the game but can’t lose in case the stock did just find a temporary bottom. We have until July expiration for the rest of the trade to play out.
1st Update May 3, 2012
From the way back machine, we did a crazy 1×2 in GRPN in December. Paid .70, it’s currently about 1.75. With the stock looking like it’s about to break 10 we’re going to stay put and see how it plays out. If the stock looks like it will hold this level we’ll have some room to take this trade off for a nice little profit. If it breaks down we’ll try to milk it for even more. Original trade below:
GRPN ($22.43) Bought July 10 /5 1×2 Put Spread for .70
Bought 1 July 10 Put for 1.44
Sold 2 July 5 Puts at .37 each
Break-Even on July Expiration:
Profits btwn 9.30 and .70 make up to 4.30 with max gain at 5.00 of 4.30
Losses of up to .70 btwn 10 and 9.30 and then again btwn Zero and .70, with max loss of .70 above 10.00