Yong-Long Lai

US market did well, DJIA & NASDAQ broke above the triple top. When the Australian market opened the same thing happened. ANZ is trading at a very low level and I believe it will be relatively stable in the next 2-3 weeks. This is a short trade because I’ve been waiting for the market to pick a direction, also banking stocks are usually stable, low volatility. Opened this one close to the money to get the premium, I wanted to be long in something after the breakout today!

The Trade (ANZ) – Traded on 13th July 2007
Sell Jul $29.26 Puts @ $0.195
Buy Jul $28.78 Puts @ $0.08

Expiry = 26/07/2007
Share/Contract = 1042
Max Profit = 0.115 (0.195-0.08)
Max Risk = 0.365 [(29.26 - 28.78 ) - (0.195-0.08)]
Return on Risk = 31.51%
Breakeven = $29.145

I opened 10 contracts:
Reward for trade (excluding fees) $1,198.3
Reward for trade (including fees) $988.90
Value At Risk $3,803.3