New Trade & Stock Split: CL

Colgate-Palmolive has announced a 2:1 (2 for 1) stock split and May 7th is when the stock price will be adjusted to reflect the stock split. I like splits because they can potentially cause increased movement in a stock’s price up until the day the stock splits. This is not necessarily true for all stock splits so be careful of the ones you choose to trade. I, however, will be keeping my eye on CL for more potential trades until it splits.

I purchased 2 April 115 call options at $2.50. I’ve set my loss limit at $2.05 and exit point at $3.25.

Here’s a look at my potential profit:

Shares or Contracts Purch Price Capital Out Sell Price Capital In Comm & Fees Gain / Loss

% Gain & Loss

2 2.50 500.00 3.25 650.00 10.00 640.00 28%


Current charts for this trade: 

 

Not familiar with stock splits? Well, a stock split is when a company decides to adjust the number of shares it has on the market. In this case, CL will give each shareholder 2 shares for every 1 share they own. This will in turn increase the number of shares CL has on the market and cut the stock price in half. Trading at a lower price can also make the stock more appealing to traders/investors. You can learn more about stock splits here. I use Investment House’s free stock split alerts to be notified of stock split announcements. If you do not want to sign up for the email notifications, you can just check their stock splits calendar from time to time. Please note, I do not receive any compensation for you signing up for their services.

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