Building a Long position in Linn Energy

I am reviewing several trade ideas in $LINE using Options and have settled on the following setup:

Long the July/June 32 Call Calendar
Long the July 30 Put
Short the October 28 Put (takes margin, pays for the trade)
This trade can be done for Free as of the close

Here is a breakdown:

I want to be Long in July, uncapped
I want the short June 32 Call to expire Friday
To finance the trade, I am selling the October 28 Put. To protect this piece, I am buying the July 30 Put (you could own the 29 strike instead, makes the trade a credit). I want some downside opportunity in case I am wrong so I like the $2 Put Calendar range.

I like jumping into the fray with this stock, a lot of activity on both sides so I want to bring my marbles to play.

One thought on “Building a Long position in Linn Energy

  1. I did this trade on 6/19/2013 with a few adjustments: $33 Call strike, 33/31 Put Calendar strikes. Later adjusted the June Call to $34

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