Over the weekend, Liz and Jenny received a lot of emails about their trades from the previous week and today they're discussing one of those positions. The trade they are looking at is their "Sale of a Century" trade in Microsoft (MSFT). With these types of trades they either sell a call, short the stock, or place a poor man's covered put. Right now volatility is relatively low in MSFT, so for this "Sale of a Century" trade, they've decided to place a poor man's covered put. They set this trade up by buying a put option in the NOV expiration cycle and then selling a put option in the OCT expiration cycle. With MSFT trading at $47.12, they sell the 46 put in OCT for $0.34 and it has a 65% probability of expiring OTM. In NOV, they buy the NOV 50 put for about $3.60. Both options have about the same amount of extrinsic value and the profit potential on this trade is the difference between the price of the stock at $47.12 and the strike price of $46. This results in a potential profit of $1.12 at expiration for an initial cost of $3.60. If volatility was higher they would most likely sell options, but they have to work with what the market gives them and in their opinion, this is a better strategy given the relatively low level of volatility.