Today’s episode of What’s Trading details candy sales, the big business of Easter, and a July put seller in Mondelez International (MDLZ). The link to the video is below as well as additional commentary on the trade.  Click here to watch the episode and continue below to learn more about the trade.

WT_041317

The payoff diagram below shows the potential P&L if someone was short (sold) ONE July 40 put in MDLZ for $0.77 and held the position until expiration. The maximum loss is considerable and the maximum potential profit is limited to the $77/put sold. The expiration breakeven point is $38.23, which is about 12% below where MDLZ shares were trading at execution.

MDLZ P&L expiration

The 52 week low in MDLZ is $40.15.

MDLZ 52 weeks