Potential winners in bull and bear plays on Agrium (NYSE: AGU)

More News On AGU

• AGU

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  July 02, 2010
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  June 16, 2010

Virtual Trade AGU

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The Pick – Agrium (NYSE: AGU):

On March 3, a Fast Money cast member suggested going long AGU. AGU shares were trading at $67.74 at the time of this Fast Money call.

Bullish Option Trading Idea for AGU:

Long calls –

• Buy two October 55 calls for $16.20 each
• Net cost of $32.40

Maximum risk: $32.40 plus class=”outsideLink” >commmissions

Maximum potential profit: Long two shares of stock above $71.20

Breakeven: The strategy will be profitable if AGU shares are trading higher than $71.20 at October options expiration.

Bearish Option Trading Idea for AGU:

Bear put spread–

• Buy January 60-40 put spreads for $5.10
• Net cost of $5.10

Maximum risk: $5.10 plus class=”outsideLink” >commissions

Maximum potential profit: $14.90 minus class=”outsideLink” >commissions

Breakeven: The strategy will be profitable if AGU shares are trading lower than $54.90 at January 2011 expiration.

By opening a free virtual trading account, you can build a profit/loss diagram to help visualize this trade.

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