ADM

Discussion in 'Options' started by oldnemesis, Feb 3, 2016.

  1. http://www.reuters.com/article/us-archerdaniels-results-ethanol-idUSKCN0VC0CC

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

    Fellow traveler:
    http://finance.yahoo.com/echarts?s=PEIX+Interactive#{"range":"2y","allowChartStacking":true}

    It looks like this will not be a good year for ADM... but remember when we all thought the ethanol plants were such a great investment before energy got so cheap.
    :)

    Trade:
    With ADM at 32.36
    Jan '17 40/45 bear call spread for a net credit of $55
    Yield = 55/445 = 12.4% in 352 days or 12.8% annualized
    Prob = 77%
    Expectation = .77(55) - .14(445) - .09(222) = 42.35 - 62.3 - 20.0 = -40

    Price............ Profit / Loss....... ROM %
    25.00.................. 55.00............... 12.40%
    30.00.................. 55.00............... 12.40%
    35.00.................. 55.00............... 12.40%
    40.00.................. 55.00............... 12.40%
    40.55.................... 0.00................. 0.00%
    43.33................ (277.90)............ -55.58%
    45.00................ (445.00)............ -87.60%
    50.00................ (445.00)............ -87.60%
    55.55................ (445.00)............ -87.60%
     
    Last edited: Feb 3, 2016