Best Stock on the Market

Put Spread on C on 2/4/2013

Citigroup Inc. is a global diversified financial services holding company whose businesses provide consumers, corporations, governments and institutions with a broad range of financial products and services. It operates in two segments: Citicorp, consisting of Citigroup's Global Consumer Banking businesses and Institutional Clients Group, and Citi Holdings, consisting of Brokerage and Asset Management, Local Consumer Lending and Special Asset Pool. Global Consumer Banking (which included retail banking and Citi-branded cards in four regions-North America, EMEA, Latin America and Asia) and Institutional Clients Group (which included Securities and Banking and Transaction Services). In February 2012, it sold its 9.85% interest in Housing Development Finance Corporation Ltd. In May 2012, it sold 10.1% interest in Akbank T.A.S. In September 2012, the Company sold EMI Group's recorded music division, EMI Music, to Vivendi and subsidiary, Universal Music Group. 

Stockwinners is bearish on this name for the following reasons:

  1. Citigroup stock closed 2012 at $39.56, so we expect buyers to step in around that level if it does get back to the unchanged market for 2013.  This  trade targets a move to that area, and we are only risking 0.45 for a 2 dollar wide spread.
  2. This trade hold  6 weeks of time value, so plenty of time in case we are  immediately correct

Trade

  • Sell 1 March $39.00 Put at $0.38
  • For a net credit of ($0.38)

Profit/Loss Analysis

  • Breakeven at $38.62
  • Maximum profit is $38.00 at strike of $39.00
  • Maximum loss is unbounded

Closing Summary

  • Bought 1 March $39.00 Put at $0.00

Position closed on 3/15/2013 at price of $0.00 with a 100.00% gain in 39 days.

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