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Call Spread on CVLT on 12/18/2012

cup & handle on CVLTIf you are worried about your data, then you would use CommVault Systems. CVLT provides data and information management software applications and related services primarily in North America, Europe, Australia, and Asia. The company develops, markets, and sells a suite of software applications and services under the Simpana brand. Its Simpana software suite includes solution for the backup and restoration of enterprise data for file systems, applications, databases, and virtual machine systems; integrated data archiving solution that optimizes data tiering and improves information governance; and enterprise-wide storage optimization for email and files reducing space on primary storage. The company also provides solutions for protection of critical applications and data with snapshots and real-time replication; solutions to analyze, discover, track, trend, and report on physical and virtual storage usage; and Web browser, which allows search, sort, select, and retrieval of corporate files and information from online, archive, and backup data copies.

Here is the trade:

Buy One CVLT January $70 Call Option at $3.00

Sell One CVLT January $75 Call Option at $1.30.

Net Investment:  $1.70

Maximum Profit: $5.00 if stock closes at $75 by the expiration

Maximum Loss:  $1.70 if stock drops below $70 by expiration

Stock last traded at $70.72.

Trade

  • Buy 1 January $70.00 Call at $3.00
  • Sell 1 January $75.00 Call at $1.30
  • For a net debit of $1.70

Profit/Loss Analysis

  • Breakeven at $71.70
  • Maximum profit is $330.00 at strike of $75.00
  • Maximum loss is ($170.00) at strike of $70.00

Closing Summary

  • Sold 1 January $70.00 Call at $4.10
  • Bought 1 January $75.00 Call at $1.50

Position closed on 12/20/2012 at price of $2.60 with a 52.94% gain in 2 days.

Updates

12/20/2012 10:14:57 AM

We are going to close this position at a nice profit. The $70 Call option closed at $4.10, and the $75 Call option at $1.50. That is a net of $2.60 vs. a net initial investment of $1.70. That is a 52.9% profit in 3 days. If you elect to stay in the trade, please adjust your stop loss.

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