GE

Discussion in 'Options' started by oldnemesis, Apr 24, 2016.

  1. http://finance.yahoo.com/news/ge-matches-q1-earnings-estimate-120512810.html

    http://www.usatoday.com/story/money...lectric-first-quarter-2016-earnings/83376658/

    http://www.msn.com/en-us/money/stockdetails/financials/fi-126.1.GE.NYS

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

    Trade:
    with GE at 30.76
    March '17 25/20 bull put spread for a net credit of $50
    Yield = 50/450 = 11.1% in 327 days or 12.4% annualized
    Prob = 93%
    Expectation = .93(50) - .02(450) - .05(225) = 46.5 - 9.0 - 11.25 = 26.25

    Price.................. Profit / Loss ..........ROM %
    15.00..................... (450.00).............. -88.90%
    17.50..................... (450.00).............. -88.90%
    20.00..................... (450.00).............. -88.90%
    24.24..................... (26.20).................. -5.24%
    24.50........................ 0.00.................... 0.00%
    25.00...................... 50.00................... 11.10%
    27.50...................... 50.00................... 11.10%
    30.00...................... 50.00................... 11.10%
    35.00...................... 50.00................... 11.10%

    A blue chip buy and hold substitution (GE pays a dividend of 3%)

    :)