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Dan Nathan's Risk Reversal Sprint Trade

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Speaking on CNBC's Options Action, Dan Nathan suggested a risk reversal call spread strategy in Sprint Corp (NYSE: S).

He explained that there are some rumors of a possible takeover and in case the stock moves higher, he wants to participate in the upside with a risk reversal call spread. Nathan wants to sell the January 7 put for $0.80, buy the January 10 call for $1 and sell the January 15 call for $0.20.

The trade is going to make money if the stock trades above $10 at the January expiration and it can make a maximal profit of $5. If the stock drops below $7 at the January expiration the trade is going to lose money.

Posted-In: Dan Nathan Options ActionCNBC Options Markets Media

 

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