We are adding a 1×2 put spread in Cameco (CCJ) today. Because there is a “naked” put involved, this only makes sense if willing to own 100 shares of stock at a much lower cost basis than current prices. The details are below:
Buy to open: CCJ Oct 17th (monthly) 75.00 strike put (ratio of 1)
Sell to open: CCJ Oct 17th (monthly) 70.00 strike put (ratio of 2)
Debit: 0.20
Probable risk = 0.20 or $20.00 per spread (if the stock finishes above 75/share)
Max reward = 4.80 or $480.00 per spread (the nearer to 70/share finish the better)
Max risk = owning 100 shares of CCJ at a cost basis of 65.20 per share (losses below 65.20)