Trade

• Sell 25 contracts SUN February $8.82 Put Options @ 15 cents

• Buy 25 contracts SUN February $8.57 Puts Options @ 8.5 cents

Shares per contract = 1020

Net Credit 7.5 cents

Trade Summary

Maximum Profit = $1,912.50

Maximum Loss = $4462.50

Breakeven = $8.745

Return on Risk = 42.86%

Dividend

Suncorp is announcing their First Half Profit Announcement on the 24th February 2010. On this day they will confirm the Dividend amount and when SUN will go ex-dividend. Without knowing with certainty the dividend amount and the date we can use last year’s details as an approximation. Last year SUN went exercise 27th February for 20 cents. If this is relatively accurate this tells us that our position will expire before the ex-dividend date. 20 cents dividend is also a 2.2% yield which makes it highly attractive and should keep SUN strong until after the ex-dividend date.

Chart

Daily Chart:

• Short-term uptrend

• Buy on Stochastic

Weekly Chart:

• SUN is in a medium term uptrend and still a buy on the stochastic.

To receive ASX Option Recommendations or to learn more about Bull Put Spreads please request the complete Option Spreads eBook by contacting us on 1300 368 316 or info@totaloptions.com.au