http://finance.yahoo.com/news/amerisourcebergen-abc-q2-earnings-beat-185106412.html http://www.investors.com/news/ameri...ance-slash/?ven=YahooCP&src=AURLLED&ven=yahoo http://www.bizjournals.com/philadel...rcebergen-and-walgreens-extend.html?ana=yahoo http://www.bizjournals.com/philadel...1-17b-stock-buy-walgreens-boots-alliance.html http://www.msn.com/en-us/money/stockdetails/financials/fi-126.1.ABC.NYS http://finance.yahoo.com/echarts?s=ABC+Interactive#{"range":"2y","allowChartStacking":true} Trade: With ABC at $78 Jan '17 100/105 bear call spread for a net credit of $30 (at the open) Yield = 30/470 = 6.38% in 259 days or 9% annualized Prob = 88% Expectation = .88(30) - .08(470) - .04(235) = 26.4 - 37.6 - 9.4 = -20.6 Price..... Profit / Loss..... ROM % 55.00........... 30.00.......... 6.38% 75.00........... 30.00.......... 6.38% 85.00........... 30.00.......... 6.38% 100.00......... 30.00.......... 6.38% 100.30............ 0.00........... 0.00% 101.86...... (155.60)....... -31.12% 105.00...... (470.00)....... -93.62% 115.00...... (470.00)....... -93.62% 125.00...... (470.00)....... -93.62% The probability of ABC reaching $100 computes out to 12% using distributions but in 'real life' terms I would say it's nil unless someone buys them.