YAHOO!! A credit spread

Here is some interesting news on Yahoo regarding Carl Icahn and his purchase of 50 million shares of the company. With all the talk around Yahoo and Microsoft and Mr Icahn the volatility of this stock has been up creating some decent premiums, although right now it has fallen to its normal levels in the 30s, most liekly due to the recent news. Here is the article… Profiting from any outcome of the Microsoft/Yahoo deal

From this article, the opinion of the writer is to do a debit spread or a credit spread -

If you want immediate gratification, you may consider the October 20/17.50 put credit spread for a 25 cent credit. This is also an 11.1% return, and the stock has to fall 26.8% to cause a problem

In looking at this trade, it is a little too far out as far as time is concerned. I prefer 2 to 6 weeks, this trade gives the stock entirely too much time to get back to $20 from which it came. Although in the last two years the stock has not been below 17.5, so with the current support at 22.50 or so this may be a good long term credit spread.