LMT has been on a strong downtrend for the last 4 months, They reported earnings this morning and the stock price tanked further by another $30.
So , put on this Bear Call Credit spread as expecting it be weak on the upside and possibly even going down further.
| SELL | -8 | TO OPEN | LMT | 21-Feb-25 | 485 | CALL | 1.93 | 0.57 | 25TRD-002 |
| BUY | 8 | TO OPEN | LMT | 21-Feb-25 | 490 | CALL | 1.36 | CREDIT |
The spread will expire in around 24 days where we do not think it will touch $485 which is the strike of the sold call.
We are looking at a potential full credit of $450 on $3550 investment, resulting in around 12% approx returns if price does not breach upper threshold of $485.