ADM

[oldnemesis]

http://www.reuters.com/article/us-archerdaniels-results-ethanol-idUSKCN0VC0CC

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

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

It looks like this will not be a good year for ADM... but remember when we all thought the ethanol plants were such a great investment before energy got so cheap.


Trade:
With ADM at 32.36
Jan '17 40/45 bear call spread for a net credit of $55
Yield = 55/445 = 12.4% in 352 days or 12.8% annualized
Prob = 77%
Expectation = .77(55) - .14(445) - .09(222) = 42.35 - 62.3 - 20.0 = -40

Price............ Profit / Loss....... ROM %
25.00.................. 55.00............... 12.40%
30.00.................. 55.00............... 12.40%
35.00.................. 55.00............... 12.40%
40.00.................. 55.00............... 12.40%
40.55.................... 0.00................. 0.00%
43.33................ (277.90)............ -55.58%
45.00................ (445.00)............ -87.60%
50.00................ (445.00)............ -87.60%
55.55................ (445.00)............ -87.60%