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Thursday, February 10, 2011

The Panera Trade

A few days ago, I wrote about using a bull spread with Panera Bread stock, specifically the 70-90 bull spread for August. With the release of this evening's earnings report from Panera, this has become an even better trade. The stock is up over ten dollars after hours to about $110, thereby making it more likely that the price will remain over $90 at the time of the August expiration. So for low risk, I made an investment that has an annualized return well over 40% for six and a half months.

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