GE: http://www.nytimes.com/2012/07/21/business/ge-profit-beats-estimates.html?partner=yahoofinance http://finance.yahoo.com/news/ge-2q-earnings-drop-16-110520975.html http://finance.yahoo.com/q/ks?s=GE+Key+Statistics http://investing.money.msn.com/investments/financial-statements?symbol=ge http://finance.yahoo.com/q/bc?s=GE&t=2y&l=on&z=l&q=l&c= Trade: Dec 17/14 bull put spread for a net credit of $24 Yield = 24/276 = 8.7% in 153 days or 20.7% annualized Prob = 86.9% Expectation = .869(24) - .01(276) - .12(138) = 20.9 - 2.76 - 16.6 = 1.54
SPY: http://stockcharts.com/h-sc/ui?s=spy Create condor from put and call spreads each netting $20 after commissions: Put Spread sell 5 Aug 127 put and buy 5 Aug 126 put for a net credit of $35 Commission = $15 Yield = (35 - 15) /(500 -(35 - 15)) = 20/480 = 4.2% IN 26 days or 58% annualized Prob = 96% Expectation = .96(20) - .02(480) - .02(240) = 19.2 - 9.6 - 4.8 = 4.8 Call Spread Sell 5 Aug 142 call and buy 5 Aug 143 call for a net credit of $35 commission = 15 Yield = (35-15)/(500 - (35-15)) = 20/480 = 4.2% in 26 days or 58% annualized Prob = 85% Expectation = .85(20) - .11(480) - .04(240) = 17 - 52.8 - 9.6 = -45.4 Put spread is good, call spread is a loser based on probability. If done separately expectation = 4.8 - 45.4 = -40.6 If done combined: sell 5 Aug 127 put and buy 5 Aug 126 put & Sell 5 Aug 142 put and buy 5 Aug 143 put for a net credit of $70 Yield = (70 - 30)/(1000 - (70-30)) = 40/960 = 4.2% in 26 days or 58% annualized Prob = 90.5% Expectation = .905(13) - .02(87) -.08(87)= 11.8 - 1.76 - 6.9 = 3.14 Can't be wrong both ways at once.
HNZ: http://finance.yahoo.com/news/heinz-beats-eps-gives-2013-153518019.html http://finance.yahoo.com/news/heinz-retained-neutral-154520407.html http://finance.yahoo.com/q/bc?t=5y&s=HNZ&l=on&z=l&q=l&c=&ql=1&c=^GSPC http://investing.money.msn.com/investments/financial-statements?symbol=hnz http://finance.yahoo.com/q/ks?s=HNZ+Key+Statistics (I don't like the trailing P/E, especially for a food company.) http://blogs.barrons.com/incomeinve...es-up-7-3-dividend-increase/?mod=yahoobarrons (HNZ payout ratio is 67%) http://finance.yahoo.com/q/bc?t=5y&s=HNZ&l=on&z=l&q=l&c=&ql=1 Trade: March '13 45/40 bull put spread for a net credit of $35 Yield = 35/465 = 7.5% in 234 days or 11.7% annualized Prob = 98% Expectation = .98(35) - .01(465) - .01(232) = 34.3 - 4.65 - 2.32 = 27.33
MCD: http://www.bloomberg.com/news/2012-...es-on-slowing-u-s-store-sales.html?cmpid=yhoo http://www.cnbc.com/id/48290656?__source=yahoo|headline|quote|text|&par=yahoo http://finance.yahoo.com/q/ks?s=MCD+Key+Statistics http://investing.money.msn.com/investments/financial-statements?symbol=mcd http://finance.yahoo.com/q/bc?s=MCD&t=5y&l=off&z=l&q=l&c=^GSPC http://finance.yahoo.com/q/bc?s=MCD&t=5d&l=off&z=l&q=l&c=^GSPC http://finance.yahoo.com/q/bc?s=MCD&t=5y&l=on&z=l&q=l&c= Trade: Dec 70/65 bull put spread for $22 Yield = 22/478 = 4.6% in 150 days or 11.2% annualized Prob = 98% Expectation = .98(22) - .01(478) - .01(239) = 21.6 - 4.8 - 2.4 = 14.4
CORN: http://blogs.barrons.com/focusonfun...mp-trigger-halt-funds-slide/?mod=yahoobarrons http://finance.yahoo.com/q/bc?s=CORN&t=2y&l=on&z=l&q=l&c= Trade: with CORN at 49.21 Nov 40/35 bull put spread for a net credit of $55 Yield = 55/445 = 12.36% in 115 days or 39% annualized Prob = NA Expectation = NA
NFLX: http://www.reuters.com/article/2012...eedType=RSS&feedName=globalMarketsNews&rpc=43 http://seekingalpha.com/article/745...y-reports-gain-of-0-11-per-share?source=yahoo http://finance.yahoo.com/news/netflix-investors-taking-profits-europe-233933849.html http://www.forbes.com/sites/larryma...t-streaming-is-here-to-stay/?partner=yahootix http://finance.yahoo.com/q/ks?s=NFLX+Key+Statistics http://stockcharts.com/h-sc/ui?s=nflx looking for a 10AM trade.
NFLX Ctd: I have been unable to get a trade with a positive expectation because of the extreme volatility of the stock. My statistical methodology is not appropriate to these kinds of situations. e.g. Jan '13 90/95 bear call spread for $35 Yield = 35/465 = 7.5% in 176 days or 15.6% annualized Prob = 90.5% Expectation = .905(35) - .074(465) - .02(232) = 31.7 - 34.4 - 4.5 = - 7.2 Just as well...On NFLX I pass.
MMM: http://www.bloomberg.com/news/2012-...as-health-care-sales-increase.html?cmpid=yhoo http://finance.yahoo.com/q/ks?s=MMM+Key+Statistics http://investing.money.msn.com/investments/financial-statements?symbol=MMM http://finance.yahoo.com/q/bc?t=5y&s=MMM&l=on&z=l&q=l&c=&ql=1&c=^GSPC http://finance.yahoo.com/q/bc?s=MMM&t=5y&l=on&z=l&q=l&c= Trade: with MMM at 91.42: Jan 70/65 bull put spread for $25 Yield = 25/475 = 5.26% in 175 days or 11% annualized Prob = 99% Expectation = .99(25) - .01(475) = 24.75 - 4.75 = 20 for me this is a rollover
MRK: http://finance.yahoo.com/news/mercks-2q-net-falls-charges-113238222.html http://finance.yahoo.com/news/merck-beats-affirms-view-131943271.html http://finance.yahoo.com/q/ks?s=MRK+Key+Statistics http://finance.yahoo.com/q/bc?t=5y&s=MRK&l=on&z=l&q=l&c=&ql=1&c=^GSPC http://finance.yahoo.com/q/bc?t=5y&s=MRK&l=off&z=l&q=l&c=&ql=1 Trade: with MRK at 45.08: Jan 37/32 bull put spread for $25 Yield = 25/475 = 5.26% in 175 days or 11% annualized Prob = 95% Expectation = .95(25) - .02(475) - .03(235) = 23.75 - 9.5 - 7.1 = 7.15