DG

Discussion in 'Options' started by oldnemesis, Mar 13, 2016.

  1. http://247wallst.com/retail/2016/03/13/why-analysts-became-much-more-bullish-on-dollar-general/

    http://www.thestreet.com/story/1349...pped-at-jefferies.html?puc=yahoo&cm_ven=YAHOO

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

    http://finance.yahoo.com/q/is?s=DG+Income+Statement&annual

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

    Trade:
    With DG at 85.01
    Jan '17 55/50 bull put spread for a net credit of $30
    Yield = 30/470 = 6.38% in 313 days or 7.4% annualized
    Prob = 98%
    Expectation = .98(30) - .01(470) - .01(235) = 29.4 - 4.7 - 2.4 = 22.3

    Price........... Profit / Loss......... ROM %
    37.50............... (470.00)........... -93.60%
    50.00............... (470.00)........... -93.60%
    50.70............... (400.30)........... -80.06%
    54.70.................... 0.00.............. 0.00%
    55.00.................. 30.00.............. 6.38%
    65.00.................. 30.00.............. 6.38%
    75.00.................. 30.00.............. 6.38%
    85.00.................. 30.00.............. 6.38%
    95.00.................. 30.00.............. 6.38%

    With March expiration creating idle money this is an alternative to the long term treasury rate.

    https://ycharts.com/indicators/30_year_treasury_rate
     
    Last edited: Mar 13, 2016