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Consider This Not-Overly-Bullish Play on Jabil Circuit (NYSE:JBL)

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You'll make money on this trade if the stock is flat, up, or down less than 8.5% between now and October expiration.

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The front month (Oct) ATM strangle is trading at $2.75, which suggests about a 10% move.

06/20/12 $19.42 $20.75 $+1.33 (6.8%)
03/21/12 $26.49 $25.88 $-0.61 (-2.3%)
12/21/11 $19.95 $19.40 $-0.55 (-2.8%)
09/28/11 $17.38 $18.84 $+1.46 (8.4%)
Average Magnitude of Post Earnings Return 5.1%

Trade: Selling the October 20-19 Put Spread for $.30

Risk: $70 per 1 lot

Reward: $30 per 1 lot

Breakeven: $19.70

Why I Like This Trade: The stock has rallied or sold off less than 3% on every one of the last four earnings quarters. I like this trade because it is bullish, but not aggressively bullish. I want to get Jabil if there is a pullback, and I make money on this trade if the stock is flat, up, or down less than 8.5% between now and October expiration.

No positions in stocks mentioned.
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