Yong-Long Lai

QBE is trading at the support level, its been trending sideway for the past 4 months so its trading at the support and should bounce back. That said, the market is quite volatile last month so I’ve done a $1 spread to reduce the risk (ie. breakeven is lower).

The Trade (QBE) – Traded on 4th July2007
Sell Jul $30.50 Puts @ $0.385
Buy Jul $29.50 Puts @ $0.185

Expiry = 26/07/2007
Share/Contract = 1000
Max Profit = 0.20 (0.385-0.185)
Max Risk = 0.8 [(30.5-29.5) - (0.385-0.185)]
Return on Risk = 25%
Breakeven = $30.30

I opened 5 contracts:
Reward for trade (excluding fees) $1,000.0
Reward for trade (including fees) $801.80
Value At Risk $4,000.0