MON: short/put

MON has broken the intermediate uptrend line started on Aug 2007. Target is to touch the strong support at 95. If 95 can be broken then it will go down to about 85.5.

Entry: open a position when MON < 108 in the next trading day.

long put: MON Jul 90 put. bid/ask=5.6/5.9, theoretical value=6.471. delta=-0.235. current IV=60.78.

Mar options: the following spread for a credit of $2.65

• short MON Mar 105 call;
• long MON Mar 110 call;

breakeven=107.65. max profit=265 when MON<=105, max loss=235 when MON>=110.

April options: the following spread for a credit of $3.30

• short MON Apr 95 call;
• long MON Apr 100 call;

Breakeven=98.3, max profit = 330 when MON <=95, max loss = 170 when MON >=100.