Conservative Options Trades

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

  1. This new software really sucks

    DBA:

    http://finance.yahoo.com/news/cool-...;_ylg=X3oDMTBhYWM1a2sxBGxhbmcDZW4tVVM-;_ylv=3

    http://www.reuters.com/article/2014/08/06/us-ukraine-crisis-putin-food-idUSKBN0G61P020140806

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

    Trade:
    With DBA at 26.15
    Jan '15 28/33 bear call spread for a net credit of $30
    Yield = 30/470 = 6.38% in 159 days or 14.6% annualized
    Prob = 75%
    Expectation = .75(30) - .01(470) - .24(235) = 22.5 - 4.7 - 56.4 = -38.6


    Price..........Profit / Loss..........ROM %
    20.00.......... 30.00............... 6.38%
    25.00.......... 30.00............... 6.38%
    28.00.......... 30.00............... 6.38%
    28.14.......... 16.40............... 3.28%
    28.30............ 0.00............... 0.00%
    32.51....... (420.80)........... -84.16%
    33.00....... (470.00)........... -94.00%
    35.00....... (470.00)........... -94.00%
    40.00....... (470.00)........... -94.00%

    The trade has a negative expectation based on previous price distribution but I am assuming that agricultural products prices will move down in distribution due to the record harvest and Putin ban. The full fall harvest will put pressure on ag prices into the end of December, and this pressure will be increased if Putin persists. The harvest is the important thing as the US exports very little ag directly to Russia, but there may be a push back effect from other countries which export more to Russia. I'm sure somebody has a model but I haven't seen it quoted as of yet.

    It will make for a drab Russian winter and cheap food in Europe and the US. We could put more corn into ethanol and more soy beans into biodiesel but energy is also abundant in the US due to the surplus in natural gas.

    Thus: bear market in agricultural products.

    http://growingms.com/news/2014/07/corn-growers-feel-bite-bear-market/
     
    #811     Aug 11, 2014
  2. MCD:

    http://blogs.wsj.com/corporate-intelligence/2014/08/08/the-big-mac-is-in-a-big-slump/?mod=yahoo_hs

    http://finance.yahoo.com/news/mcdon...sales-fall-2-5-percent-121235648--sector.html

    http://www.nydailynews.com/life-style/eats/hamburglar-mcdonald-stinks-article-1.1852181

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

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

    Trade:
    With MCD at 93.55
    Jan '15 100/105 bear call spread for a net credit of $55
    Yield = 55/445 = 12.4% in 159 days or 28.4% annualized
    Prob = 78%
    Expectation = .78(55) - .09(445) - .12(223) = 42.9 - 40.1 - 26.8 = -24


    Price..........Profit / Loss..........ROM %
    70.00........... 55.00............. 12.40%
    80.00........... 55.00............. 12.40%
    95.00........... 55.00............. 12.40%
    100.00......... 55.00............. 12.40%
    100.55........... 0.00.............. 0.00%
    105.00...... (445.00).......... -89.00%
    110.00...... (445.00).......... -89.00%
    120.00...... (445.00).......... -89.00%
    130.00...... (445.00).......... -89.00%
     
    #813     Aug 11, 2014
  3. TGT:

    http://finance.yahoo.com/news/target-slumps-strong-sell-preliminary-194502455.html

    http://blogs.barrons.com/stockstowa...re-wrong-on-target/?mod=yahoobarrons&ru=yahoo

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

    Trade:
    with TGT at 58.36

    Jan '15 65/70 bear call spread for a net credit of $38
    Yield = 38/462 = 8.2% in 158 days or 19% annualized
    Prob = 80%
    Expectation = .8(38) - .08(462) - .12(231) = 30.4 - 36.9 - 27.7 = -34.2

    Price.............Profit / Loss...........ROM %
    50.00.............38.00........................8.20%
    55.00.............38.00........................8.20%
    61.00.............38.00........................8.20%
    65.00.............38.00........................8.20%
    65.38.............0.00..........................0.00%
    69.83.............(445.10)..................-89.02%
    70.00.............(462.00)..................-92.40%
    75.00.............(462.00)..................-92.40%
    80.00.............(462.00)..................-92.40%
     
    Last edited: Aug 11, 2014
    #814     Aug 11, 2014
  4. #815     Aug 12, 2014
  5. CREE:

    http://finance.yahoo.com/news/bank-america-responds-crees-report-120443857.html

    http://finance.yahoo.com/news/cree-beats-q4-earnings-strong-132003750.html

    http://www.thestreet.com/story/1284...urs-trading-today.html?puc=yahoo&cm_ven=YAHOO

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

    trade:
    With CREE at 44.74
    Jan 55/60 bear call spread for a net credit of $50
    Yield = 50/450 = 11.1% in 156 days or 26% annualized
    Prob = 80%
    Expectation = .8(50) - .13(450) - .07(225) = 40 - 58.5 - 15.8 = -34.3

    Price.........Profit / Loss........ROM %
    35.00............50.00.............11.11%
    40.00............50.00.............11.11%
    50.00............50.00.............11.11%
    55.00............50.00.............11.11%
    55.50..............0.00..............0.00%
    58.20..........(270.00)..........-54.00%
    60.00..........(450.00)..........-90.00%
    65.00..........(450.00)..........-90.00%
    75.00..........(450.00)..........-90.00%
     
    #816     Aug 13, 2014
  6. AMZN:
    http://finance.yahoo.com/news/mobile-payments-turn-amazon-amzn-221248020.html

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

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

    Trade:
    with AMZN at 326.28
    Jan 400/405 bear call spread for a net credit of $50
    Yield = 50/450 = 11.1% in 155 days or 26.1% annualized
    Prob = 91%
    Expectation = .91(50) - .08(450) - .01(225) = 45.5 - 36.0 - 2.3 = 7.2

    Price...........Profit / Loss.........ROM %
    244.71............50.00..........11.10%
    294.90............50.00..........11.10%
    347.74............50.00..........11.10%
    400.00............50.00..........11.10%
    400.50..............0.00............0.00%
    400.58.............(7.70)...........-1.54%
    405.00..........(450.00).........-90.00%
    453.41..........(450.00).........-90.00%
    506.25..........(450.00).........-90.00%
     
    Last edited: Aug 14, 2014
    #817     Aug 14, 2014
  7. NLY:

    http://finance.yahoo.com/news/key-background-annaly-capital-biggest-145954347.html

    http://247wallst.com/banking-financ...red-annaly-earnings-plus-key-analyst-upgrade/

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

    http://investing.money.msn.com/investments/financial-statements?symbol=NLY

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

    Trade:
    With NLY at 11.76
    Jan '16 10/8 bull put spread for a net credit of $56
    Yield = 56/144 = 39% in 516 days or 28% annualized
    Prob = 89%
    Expectation = .89(56) - .01(144) - .10(72) = 49.84 - 1.4 - 7.2 = 41.29

    Price.......Profit / Loss......ROM %
    6.00........(144.00).............-72.00%
    7.67........(144.00).............-72.00%
    8.00........(144.00).............-72.00%
    9.43...........(1.30)...............-0.65%
    9.44............0.00..................0.00%
    10.00..........56.00...............39.00%
    11.18..........56.00...............39.00%
    12.94..........56.00...............39.00%
    14.70..........56.00...............39.00%
     
    Last edited: Aug 16, 2014
    #818     Aug 16, 2014
  8. ABM:

    http://online.barrons.com/news/arti...4580087500431277276?mod=yahoobarrons&ru=yahoo

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

    http://investing.money.msn.com/investments/financial-statements?symbol=ABM

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

    Trade:
    with ABM at 25.56
    Jan 22.5/25 bull call spread for a net debit of $215
    Yield = 35/215 = 16.3% in 151 days or 39.4% annualized

    Price.........Profit / Loss.......ROI %
    16.88...........(215.00)........-100.00%
    19.77...........(215.00)........-100.00%
    22.50...........(215.00)........-100.00%
    22.81...........(183.60)..........-85.40%
    24.65................0.00..............0.00%
    25.00..............35.00............16.28%
    25.86..............35.00............16.28%
    28.90..............35.00............16.28%
    31.95..............35.00............16.28%
     
    Last edited: Aug 18, 2014
    #819     Aug 18, 2014