Conservative Options Trades

Discussion in 'Journals' started by danshirley, Aug 21, 2011.

  1. ACI:

    http://finance.yahoo.com/news/cost-cuts-see-arch-coal-204008567.html

    http://finance.yahoo.com/news/rulings-require-feds-consider-carbon-192935115.html

    http://finance.yahoo.com/news/arch-coal-liquidity-continues-fall-160633983.html

    http://finance.yahoo.com/news/arch-coal-reduces-fiscal-2015-190545623.html

    http://www.msn.com/en-us/money/stockdetails/fi-126.1.ACI.NYS?symbol=ACI&form=PRFIEQ

    http://www.commondreams.org/news/20...fies-need-paradigm-shift-global-energy-system

    http://stockcharts.com/h-sc/ui?s=aci

    Trade:
    With ACI at 0.77
    Jan '17 1/0.5 bear put spread for a net debit of $34
    Yield = 16/34 = 47% in 612 days or 28% annualized
    Breakeven at 0.66

    Price.............. Profit / Loss......... ROI %
    0.40.................... 16.00................. 47.00%
    0.50.................... 16.00................. 47.00%
    0.54.................... 11.70................. 34.41%
    0.66...................... 0.00.................. 0.00%
    0.72..................... (6.00).............. -17.65%
    0.90.................... (23.60)............. -69.41%
    1.00.................... (34.00)........... -100.00%

    A cheap bet on coal's demise.
     
    Last edited: May 19, 2015
    #971     May 19, 2015
  2. ALKS: CLOSEOUT

    Someone complained that I never closeout my trades. This is true. Why is that?

    Well...there really is no reason to. This thread proposes POSSIBLE trades. It is not a log of my actual trades. I may investigate a trade here and decide that it doesn't fit my portfolio or the stage of the market and not actually make the trade. I do not guarantee that I make all, or even most trades that are investigated in this thread.

    If I do make the trade my brokerage accounts keep an infinitely better record of those trades and spending time updating this thread with closeouts and expirations is wasted time for me, regardless of how useful it may be for some erstwhile critic.

    Also...I am not trying to PROVE anything by this thread. I am simply exploring POSSIBLE trades that MAY fit my methodology.

    Now today I closed out a trade. Back on 2/25 I implemented a bear call spread trade on ALKS. If you go back in this thread to 2/25 you will find a complete record of the logic of that trade.
    Today ALKS began to pull up primarily because ALKS reported a narrower loss than expected for last quarter. There are other news items which may also raise people's expectation for the stock.

    Since my bear call spread had realized 75% of it's expected profit, rather than wait to see how big the response would be and how long it would last I just closed the trade.

    In real terms the trade realized 72 (out of 95 possible) points with a 405 outlay for a gain of 72/405 = 17.8% in 83 days or 78% annualized.

    Now it does ME no good whatsoever to make this kind of report as the data is in my brokerage account is complete and is all I need, and I will never do it again.
     
    #972     May 19, 2015
    Gimpyron likes this.
  3. PAA:

    http://edition.cnn.com/2015/05/21/us/california-oil-spill/index.html

    http://www.msn.com/en-us/money/stockdetails/fi-126.1.PAA.NYS?symbol=PAA&form=PRFIEQ

    http://stockcharts.com/h-sc/ui?s=paa

    Trade:
    with PAA at 47.43
    Jan 40/37.5 bull put spread for a net credit of $30
    Yield = 30/220 = 13.6% in 239 days or 20.8% annualized
    Prob = 83%
    Expectation = .83(30) - .09(220) - .08(110) = 24.9 - 19.8 - 8.8 = -3.7 = 0.0

    Price.............. Profit / Loss................ ROM %
    28.13............... (220.00).................... -88.00%
    34.11............... (220.00).................... -88.00%
    37.50............... (220.00).................... -88.00%
    39.70................... 0.00......................... 0.00%
    40.00.................. 30.00....................... 13.60%
    40.40.................. 30.00....................... 13.60%
    46.70.................. 30.00....................... 13.60%
    52.99.................. 30.00....................... 13.60%
    59.29.................. 30.00....................... 13.60%

    John Bogle on yield (and other things):
    http://www.pbs.org/wgbh/pages/front...the-train-wreck-awaiting-american-retirement/

    When John Bogle was much younger then he is today and was just starting the Vanguard funds he used to have lunch at the John Wanamaker lunch room in the King of Prussia Mall (near Philadelphia). He used to read the Wall Street Journal and have soup and a sandwich. It was a very cheap lunch.

    The reason I know this is that I used to go to the same place and get the same lunch.
     
    Last edited: May 21, 2015
    #973     May 21, 2015
  4. LL:
    http://finance.yahoo.com/news/lumber-liquidators-ceo-quits-catching-130229920.html
    http://www.marketwatch.com/story/has-lumber-liquidators-stock-put-in-a-floor-2015-05-21
    http://www.msn.com/en-us/money/stockdetails/fi-126.1.LL.NYS?symbol=LL&form=PRFIEQ
    http://stockcharts.com/h-sc/ui?s=ll

    Trade:
    with LL at $21.10
    Jan '17 20/23 bull call spread for a net debit of $90
    Yield = 210/90 = 233% in 610 days

    Price............ Profit / Loss......... ROI %
    15.00............. (90.00).............. -100.00%
    17.00............. (90.00).............. -100.00%
    20.00............. (90.00).............. -100.00%
    20.42............. (48.30)................ -53.67%
    20.90................ 0.00.................... 0.00%
    23.00............. 210.00................ 233.33%
    24.00............. 210.00................ 233.33%
    25.00............. 210.00................ 233.33%
     
    #974     May 21, 2015
  5. CPB:
    http://finance.yahoo.com/news/campbell-soups-profit-beats-lower-125032083.html

    http://stockcharts.com/h-sc/ui?s=cpb

    Trade:
    With CPB at 47.91
    Jan 50/48 bear put spread for a net debit of $150

    Price.............. Profit / Loss........... ROI %
    35.00.................. 50.00................. 33.33%
    40.00.................. 50.00................. 33.33%
    45.00.................. 50.00................. 33.33%
    48.00.................. 50.00................. 33.33%
    48.50.................... 0.00.................. 0.00%
    50.00................ (150.00)............ -100.00%
    52.00................ (150.00)............ -100.00%
    55.00................ (150.00)............ -100.00%
    60.00................ (150.00)............ -100.00%

    CPB was able to cost cut itself to beating earnings projections despite declining revenues. I believe that some of the cost cuts are not sustainable, that the market reaction is overdone and will reverse itself by January.
     
    #975     May 22, 2015
  6. LOW:

    http://finance.yahoo.com/news/home-improvement-chain-lowes-profit-101134784.html

    http://www.forbes.com/sites/greatsp...-on-revenues-but-optimistic-outlook-persists/

    http://www.msn.com/en-us/money/stockdetails/fi-126.1.LOW.NYS?symbol=LOW&form=PRFIEQ

    http://stockcharts.com/h-sc/ui?s=low

    Trade:
    With LOW at 69.54
    Jan 55/52.5 bull put spread for a net credit of $24
    Yield = 24/226 = 10.6% in 237 days or 16.3% annualized
    Prob = 94%
    Expectation = .94(24) - .03(226) - .03(113) = 22.56 - 6.78 - 3.39 = 12.4

    Price.................. Profit / Loss.............. ROM %
    40.00..................... (226.00).................. -90.40%
    48.00..................... (226.00).................. -90.40%
    52.50..................... (226.00).................. -90.40%
    54.76.......................... 0.00...................... 0.00%
    55.00......................... 24.00.................... 10.60%
    58.00......................... 24.00.....................10.60%
    60.00......................... 24.00.....................10.60%
    70.00......................... 24.00.....................10.60%
    80.00......................... 24.00.....................10.60%
     
    #976     May 23, 2015
  7. GREK:

    http://www.bbc.com/news/business-32864068

    http://www.cnbc.com/id/102584164

    http://www.bbc.com/news/world-europe-32332221

    http://finance.yahoo.com/echarts?s=GREK+Interactive#{"range":"2y","showPrePost":false}

    Trade:
    With GREK at 12.35
    Dec 17/20 bear call spread for a net credit of $27
    Yield = 27/273 = 9.9% in 208 days or 17.4% annualized

    Price.............. Profit / Loss............ ROM %
    10.00................... 27.00................... 9.90%
    12.00................... 27.00................... 9.90%
    15.00................... 27.00................... 9.90%
    17.00................... 27.00................... 9.90%
    17.27.................... 0.00.................... 0.00%
    18.64............... (137.14)................. -45.71%
    20.00............... (273.00)................. -91.00%
    22.00............... (273.00)................. -91.00%
    25.00............... (273.00)................. -91.00%
     
    #977     May 24, 2015
  8. -------------------------------------------------------------------------------------------------------


    http://www.msn.com/en-us/money/stockdetails/fi-126.1.PAA.NYS?symbol=PAA&form=PRFIEQ

    http://stockcharts.com/h-sc/ui?s=paa

    Trade:
    with PAA at 47.43
    Jan 40/37.5 bull put spread for a net credit of $30
    Yield = 30/220 = 13.6% in 239 days or 20.8% annualized
    Prob = 83%
    Expectation = .83(30) - .09(220) - .08(110) = 24.9 - 19.8 - 8.8 = -3.7 = 0.0

    Price.............. Profit / Loss................ ROM %
    28.13............... (220.00).................... -88.00%
    34.11............... (220.00).................... -88.00%
    37.50............... (220.00).................... -88.00%
    39.70................... 0.00......................... 0.00%
    40.00.................. 30.00....................... 13.60%
    40.40.................. 30.00....................... 13.60%
    46.70.................. 30.00....................... 13.60%
    52.99.................. 30.00....................... 13.60%
    59.29.................. 30.00....................... 13.60%

    John Bogle on yield (and other things):
    http://www.pbs.org/wgbh/pages/front...the-train-wreck-awaiting-american-retirement/

    When John Bogle was much younger then he is today and was just starting the Vanguard funds he used to have lunch at the John Wanamaker lunch room in the King of Prussia Mall (near Philadelphia). He used to read the Wall Street Journal and have soup and a sandwich. It was a very cheap lunch.

    The reason I know this is that I used to go to the same place and get the same lunch.[/QUOTE]
    -------------------------------------------------------------------------------------------------------------

    Dan
    I used to see him often(j Bogle) at the Reading Terminal having Lunch.
    Often he sat with Edmound Bacon (father of Kevin Bacon actor) world prominent architect and city planner who was instumental in the rebirth of center city Philadelphia and the way it looks today. ( he worked well into his 90's)
    except for
    the Galleria which was not his finest work ...due for demo soon
    cheers
    john
     
    #978     May 25, 2015
  9. Edmond Bacon...really?

    I didn't think Bogle had much interest in Philadelphia. He put Vanguard out in Valley Forge and pretty much stayed away from center city Philadelphia. Maybe you were seeing someone else.

    As for the Gallery I don't think the problem there was so much architecture as sociology. They tried a Cherry Hill idea in center city and the overwhelmingly black population condemned the 'mall' to failure. There would be black hoodlums hanging around the lobbies drinking, making a lot of noise and making insulting remarks to white customers... all of which caused me to stay away that's for sure.
     
    #979     May 25, 2015
  10. ----------------------------------------------------------------------------------------------------------
    Where do you think he got his heart TRANSPLANT ?
    Hahneman in Phila
    where do you think he caught a train to go home (Paoli)
    At the Reading terminal in Phila.....
    His locating Vanguard outside the city was a no brainer

    The racial composition at the Gallery contributed some....
    but the design was flawed which I won't go into.
    PREIT has plans for investing hundreds of millions in its redesign and construction
    right now . Why ..are the stupid?

    john
    I will not clutter you site with this topic any longer
    cheers
    john
     
    #980     May 26, 2015