Below is a daily chart of Valeant Pharmaceuticals International, Inc. (VRX), $13.27.
Trade: Over $13.46, consider buying Jul (7/21) 11/16 bull call spread (43 DTE) at mid-point (currently $2.23/share).
Technical Setup: Breakout following pull back from Pro Gap to new uptrend daily, and Buy Setup into +WRB weekly.
Option Strategy: Bull Call Spread (BCS). Defined risk strategy where you make maximum profit if the stock closes above the short call strike at expiration. We buy bullish calls and then sell OTM calls to reduce the cost of the long call and generate time decay income.
The return on investment (ROI) is the Gain divided by the Debit, which is the maximum loss. The break-even is the lower strike price plus debit paid. Considered a mildly bullish strategy since we are not buying outright calls or buying stock, and willing to cap our gains in exchange for gain from time decay.
Stop Loss: $12.08.
Adjustments and Comments on Open Advisory Letter Trades Note: Our Trade Updates are timely posted in a separate Report in the Member’s Area. Please see that document for a current reflection on all Open and Closed Trades since the spreadsheet updates immediately and will always be more current than this e-mail update. Thank you.
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra
Managing Director and Pristine Founder
Dan Gibby
Chief Options Strategist
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