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Consider This Callendar Spread For YUM

|Includes:Yum! Brands, Inc. (YUM)

Within the last weeks, YUM has been a sure bet. The performance over the last year was 45,78% and even on last Fridays down-market, YUM gained 2,81%.

You will find plenty of fundamental and technical analysis out there which favor a continuation of YUM´s story. I don´t want to spend time on either one of these now. On the other hand, after a strong rally, there a always signs that expect a pause soon.

Since I was watching this stock for a while now, I personally believe that the positive trend will continue. A look at this chart supports my positive view:

YUM! Uptrend

The Option Play

Sell 10 April 2012 '75' strike calls (priced at 0.70$)

Buy 10 May 2012 '75' strike calls (priced at 1.36$)

Net Debit to Start: 0.66$

In case of a down-move, the lower protection for this option play is @71.21$, which is just slightly above the support @70.90$.

Here is the strategy graph:

Strategy Graph Callendar Spread YUM!

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in YUM over the next 72 hours.

Stocks: YUM