Trading Idea: A Deere & Co. (NYSE: DE) Bull Call Spread

Deere & Co. (NYSE: DE) has endured a 3% pullback in a down market today, potentially making this a good entry point for the bulls. Investors who think DE could challenge its all-time high of $60.16 or even advance through it in the next few months could consider a longer-term bull call spread.

DE Debit Spread Trade Detail

DE is currently trading at $56.08.

Debit Spread/Bull Call Spread

• Buy the June 60 call (out-of-the-money) for $2.72 cents per contract.
• Sell the June 65 call (out-of-the-money) for $1.35 cents per contract.
• Net debit of $1.37

Profit/Loss Details:

Maximum risk: $1.37 (the debit paid at the time of the trade) plus commissions.

Maximum potential profit: $3.63 (the difference between strike prices – 5 – minus the debit of $1.37). Return on risk is approximately 265%.

Breakeven: $61.37 (the strike price of the purchased call plus the debit paid).

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For more on DE:

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