Conservative Options Trades

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

  1. #782     Jun 25, 2014
  2. DD:

    http://finance.yahoo.com/news/dupont-cuts-profit-forecast-corn-204014461.html

    http://blogs.barrons.com/stockstowa...he-soybeans-did-it/?mod=yahoobarrons&ru=yahoo

    http://finance.yahoo.com/news/dupont-cuts-earnings-view-weak-162512827.html

    http://finance.yahoo.com/q/ks?s=DD+Key+Statistics

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

    http://finance.yahoo.com/q/bc?t=2y&s=DD&l=on&z=l&q=l&c=&ql=1

    Trade 1:
    with DD at 65.44
    Jan '15 72.5/77.5 bear call spread for a net credit of $40
    Yield = 40/460 = 8.7% in 203 days or 15.6% annualized
    prob = 82%
    Expectation = .82(40) - .07(460) - .11(230) = 32.8 - 32.2 - 25.3 = -25
    (requires downside follow-through on Monday)

    Trade 2 :

    Jan '15 55/50 bull put spread for a net credit of $31
    Yield = 31/469 = 6.6% in 203 days or 11.9%
    Prob = 93%
    Expectation = .93(31) - .01(469) - .06(235) = 28.83 - 4.69 - 14.1 = 10.0
     
    #784     Jun 28, 2014
  3. OC:

    http://finance.yahoo.com/news/weak-roof-business-dims-owens-144519232.html

    http://finance.yahoo.com/news/owens-corning-strong-sell-dampened-214009756.html

    http://finance.yahoo.com/q/ks?s=OC+Key+Statistics

    http://finance.yahoo.com/q/bc?t=2y&s=OC&l=off&z=l&q=l&c=&ql=1&c=^GSPC

    http://finance.yahoo.com/q/bc?t=2y&s=OC&l=off&z=l&q=l&c=&ql=1

    Trade:
    with OC at 38.68
    Jan '15 46/50 bear call spread for a net credit of $40
    Yield = 40/360 = 11.1% in 199 days or 20.4% annualized
    Prob = 83%
    Expectation = .83(40) - .08(360) - .09(180) = 33.2 - 28.8 - 16.2 = -11.8
     
    #785     Jul 1, 2014
  4. #786     Jul 1, 2014
  5. SO:

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

    http://finance.yahoo.com/q/bc?s=SO&t=2y&l=on&z=l&q=l&c=

    With SO at 44.01
    Jan '15 40/35 bull put spread for a net credit of $50
    Yield = 50/450 = 11.1% in 195 days or 20.8% annualized
    Prob = 81%
    Expectation = .81(50) - .02(450) - .17(225) = 40.5 - 9 - 38.25 = -6.75
    Compare one option contract to buying equivalent $ in stock at $44.01 (10.11 shares)
    so that investment in both cases is $450
    Spread..............................................................Stock....................................
    Price................. Profit / Loss............... ROM % .................P/L................ROM%
    26.25 .................(450.00)................. -90.00% .............(181.15)..........(40.0%)
    31.77................. (450.00)................. -90.00%..............(124.84)..........(27.7%)
    35.00 .................(450.00)................. -90.00% ...............(92.08)..........(20.5%)
    37.58................... (191.90)................ -38.38%...............(65.71)...........(14.6%)
    39.50........................ 0.00..................... 0.00%..............(46.09)............(10.1%)
    40.00...................... 50.00................... 11.10%...............(40.09).............(8.9%)
    43.39...................... 50.00.................... 11.10%...............(6.34)..............(1.4%)
    49.20...................... 50.00.................... 11.10%...............53.04...............11.7%
    55.01...................... 50.00.................... 11.10%..............112.42..............24.9%
     
    #788     Jul 5, 2014
  6. LIT:

    http://www.investing.com/analysis/battery-powered-profits-—-courtesy-of-tesla-218611

    http://finance.yahoo.com/q/pr?s=LIT+Profile

    http://finance.yahoo.com/q/bc?s=LIT&t=5y&l=off&z=l&q=l&c=

    Trade:
    with LIT at 13.81
    Sell Jan '15 $112 put for a net credit of $140
    Yield = 140/1060 = 13.2% in 194 days or 24.8% annualized
    Prob = 75%


    Price..............Profit / Loss...........ROM %
    8.00.................(260.20)...........-24.50%
    9.00................ (160.00).......... -13.33%
    10.00.................. (1.40)............ -0.12%
    10.60................... 0.00............... 0.00%
    12.00................ 140.00............. 13.20%
    13.00................ 140.00............. 13.20%
    14.00................ 140.00..............13.20%
     
    #789     Jul 7, 2014