February 10, 2020 - MDT Alert (IRBT)

Today, I would like to make a suggestion on a stock that I believe should continue to get a bounce and follow through to the upside.

The stock is iRobot Corp (IRBT).

I would like to use the same structure as the trade we just put on with KEX.

That is the unequal straddle.

IRBT reported on February 7th, so there is no scheduled earnings event in the near future.

IRBT is trading around $52.54 as I write this.

The suggestion will be an unequal straddle with a bullish bias.
 
The idea will be to buy 2 calls for every 1 put.

Buy to Open (2) February 28th - $52.50 calls @ $2.40. The 2 calls will cost $4.80

Buy to Open (1) February 28th - $52.50 put @ $2.50

The total debit will be $7.30 per position.

Based on the nominal portfolio, limit the trade to a 2 lot or a total of $1,460.  This is a 1.5% risk based on the nominal portfolio.

The end result if you trade the suggested position size is that you will own (4) February 28th - $52.50 calls and (2) February 28th - $52.50 puts.