I just added another spread trade to my mix. I was looking for a stock that was off its highs, had a decent market cap and a dividend. Cardinal Health came up.
You can see it spent the better part of 2017 above $65. It also sports a market cap of over $15B. Let’s get to the option play.
I was able to set up a spread that cost under $1.50 and had a potential return of $10. It would take 30% upside to get into the money, and 50% for maximum profit. Just under a 7X return if this stock goes up 50% in 18 months. I’ll be the first to call this gambling. As I’ve said, it doesn’t take too many wins to make up for a string of losses. Will Cardinal Health return to its recent highs? I don’t know, but for this kind of return, I’ll take a chance.