Conservative Options Trades

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

  1. NWN:
    Utility... distributer of Nat Gas.
    Recession resistant:^DJI

    Sell the March '12 40 put and buy the March '12 35 put for a net of $35.
    Yield = 35/465 = 7.5% in 209 days or 13.1 % annualized.
    This is an' intend to be put' trade. If put NWN yields a dividend of 4.1% and a 45 covered call can augment that dividend by an additional 3.5% giving a net yield of 7.6%
    You could sell the 40 put plain and get 4.8% in the same 209 days or 8.5% annualized....but of course the spread has a higher yield because it has a much lower margin requirement because of the limited risk.
  2. just to let you know I am not here for advice... just to have a place to post my trades on line. If you reply I will just add you to my ignore list as I did for the last poster.
  3. "An Internet forum is a discussion area on a website. Website members can post discussions and read and respond to posts by other forum members. An Internet forum can be focused on nearly any subject and a sense of an online community, or virtual community, tends to develop among forum members. An Internet forum is also called a message board, discussion group, bulletin board or web forum. However, it differs from a blog, the name for a web log, as a blog is usually written by one user. An Internet forum usually allows all members to make posts and start new topics."

    Your thread doesn't fit the description of an internet forum where "members can post discussions and read and respond to posts by other forum members". Perhaps a blog is what you need since a blog "is usually written by one user". EliteTrader is an INTERNET FORUM. :)
    Bibr likes this.
  4. +1
  5. Note:neither this nor any posting on this thread is meant as a recommendation to make a trade. It is simply my exploration of possibilities for my own use.


    Sell the GOOG Jan 320 put and buy the GOOG Jan 310 put for a net credit of $61
    Yield = 61/939 = 6.5% in 151 days or 15.7% annualized
    (Probabilities from OptionsXpress)
    Prob = 93%
    Expectation = .93(61) - .05(939) - .02(469) = 56.7 - 47 - 9.4 = .03

    That spread is being offered at $50 as of closing today which would have a negative expectation. We need to get at least $61 for that spread for the expectation to be barely positive.

    Probably not worth the effort.
  6. oddsman


    If you prefer the unwashed masses to ignore your posts, perhaps elitetrader and notmsnmoney.proboards are not the best places to record your thoughts.
    Sandhillguy likes this.
  7. ABT:
    "Abbott Laboratories (ABT) At $49.08, it is trading at a discount of 9.51% from its 52-week high of $54.24, 14.96 times its earnings per share of $3.28 and a quarterly revenue growth rate of 9%. It is much cheaper than its industry peers like Merck & Co. Inc. (MRK) and Sanofi-Aventis (SNY), which have a price-to-earnings ratio of $33.69 and $14.53 and quarterly revenue growth rates of 7.10% and -5.00% respectively. Its price to book ratio of 2.88 also looks attractive.
    The company recently acquired the Healthcare solutions business of the Indian company Piramal for $3.7 billion, giving it a leading position in the fast growing Indian pharmaceuticals market. The company reported net revenue of $9.61 billion up 6.3% from the previous quarter, while its net profit was $1.94 billion up 124% from the previous quarter. The management raised its earnings per share guidance for 2011 and now expects to earn between $4.58 and $4.64 per share. The company has generated over $8 billion in free cash flow over the last 12 months and has paid a dividend that yields 3.9%. Since 2000, the company has hiked its dividends at an average annual rate of 9.1%. The general consensus among analysts is a buy recommendation on the stock."

    recession resistant:^DJI

    Sell the Jan '12 40 put and buy the Jan '12 35 put for a net credit of $46.
    Yield = 46/454 = 10.1% in 151 days or 24.4% annualized.
    Prob = 86.1%
    Expectation = .86(46) - .03(454) - .11(227) = 39.6 - 13.6 - 25 = $1
  8. At close the Bid on the ABT spread is .16 off my ask. I'll leave it there as a little retrace in the market might get me filled.
  9. HNZ^DJI

    Sell the Jan'12 40 put and buy the Jan '12 35 put for a net credit of $26
    Yield = 26/474 = 5.5% in 151 days or 13.3% annualized
    Prob = 91%
    Expectation = .91(26) -.02 (474) - .06(237) =23.7 - 9.48 - 14.2 = 0.2
    HNZ closed offering the spread at 20... we need 26 to have a positive expectation. I will offer at 26 tomorrow and through the week
  10. Your Probs are from Option Express ? How can I get them from IB ?
    And please explain the expectation calc.
    #10     Aug 24, 2011