Put Spread on KSS on 12/4/2012

Kohl’s Corporation (KSS) operates department stores in the United States. Its stores offer private, exclusive, and national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and housewares targeted to middle-income customers. 

The company has warned of lower earnings, sending shares into a bearish flag. Lower prices are expected.

Buy one January $45 Put option at $2.40

Sell one January $43 Put option for $1.35

Net Investment $1.05.

Last Traded at $43.87

Breakeven at $44

Doubles your money if stock drops below $43 by 3rd Friday in January

Maximum loss $1.05 if shares go over $45

Trade Buy 1 January $45.00 Put at $2.45 Sell 1 January $43.00 Put at $1.35 For a net debit of $1.10 Profit/Loss Analysis Breakeven at $43.90 Maximum profit is $90.00 at strike of $43.00 Maximum loss is ($110.00) at strike of $45.00 Closing Summary Sold 1 January $45.00 Put at $2.90 Bought 1 January $43.00 Put at $1.35

Position closed on 12/26/2012 at price of $1.55 with a 40.91% gain in 21 days.

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