Rolled 12/21/07
Today I saw that the stock was approaching support at 70. Notice the descending triangle that is still forming where the stock has a flat bottom at 70 and lower highs starting at 130 in late October and heading down to now. Therefore, I had confirmation of my bearish trend, so I rolled my bearish diagonal trade by buying back my December 75 put and sold the Jan 70.
Bought back Dec 75 for $2.63 debit & sold Jan 7o put for $6.10 giving me a total credit of $3.47.
New adjusted cost basis= $31.10-3.47= $27.65
Max Profit:
3.47/27.65=12.5% ROI in 28 days (to Feb expiration)
Max Loss:
$5.53 max loss= (20% of adj cost basis of 27.65)
New stop set to $22.12
Exit Strategy:
If not called out, I will exit and roll into Feb 1 week prior to expiration.
