By Paul Price
Market Shadows added a new position to our Put Selling Portfolio.
Drugstore chain Walgreens (WAG) dipped today after reporting lower than expected quarterly numbers. The stock is down 7.3% this morning to $44.56.
We sold one contract of the January 2015 $45 strike put @ $7.15 per share this morning.
Our break-even price is $37.85 per share.
Best Case: Our best case scenario will occur if WAG closes at $45 or higher on the option expiration date. Our maximum profit would be the $715 we collected when we sold the put option.
Worse Case: If WAG closes below $45 on the option expiration date, we will be forced to buy 100 shares of WAG for a net cost of $37.85 per share.
WAG could drop as much as $6.71 per share from the current price (i.e., dropping up to 15% from $44.56) without causing a loss.
Check out full details of the entire option portfolio here Virtual Put Selling Portfolio.