Trade update (Sep/22/2012):
Both puts expired worthless giving us 55c for approx. 122% profit
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GM's price today $22 (IPO high price was ~ $40)
FB's price today is $19 (IPO high price ~ $40)
Although the post-IPO results of Facebook have been similar to GM's, the FB debacle is considered horrendous while our president calls General Motors a success story. Related link.
Chartwise GM may look more attractive to the upside, I want to play FB to moderate upside on how it formed a kicker pattern a few days back and has held the previous lows. Although there are no guarantees, but I think it has formed an intermediate low and is trying to come out of oversold conditions. I have stop loss in place in case this goes against.
TRADE:
Sell 1 sep/22 $19 put
Buy 1 sep/22 $18 put
(Got a credit of 55c on Sep/5)
*Please do your own research before buying any stock listed here. Disclaimer.
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Both expired worthless, and we eat the entire premium.
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