New Trade Setup: RL Bearish Vertical Call Spread

The model portfolio is taking a bearish stance on Ralph Lauren (RL) by selling a vertical call spread in the name.   We want to make the following trade:

• Buy 5 July 2012 RL 185 calls
• Sell 5 July 2012 RL 180 calls

The current midpoint price of the spread is $2.15 and we will look to offer it for $2.10 per contract.  If we get filled for all five contracts we would collect $1,050 less commissions.

This is a fictitious model portfolio managed to demonstrate trading techniques which may be used to trade a speculative account. The description of this hypothetical transaction is for education purposes only. Nothing related to the portfolio should be interpreted as a recommendation to buy or sell any security and the general techniques employed may not be suitable for every individual. Past performance of these techniques or this portfolio may not be representative of future results and results shown may vary from actual, live trading results subject to commissions and live market conditions including liquidity.