BMY

O

oldnemesis

http://news.yahoo.com/bristol-myers...-percent-cancer-181342671--finance.html?nhp=1

http://finance.yahoo.com/news/bristol-myers-beats-q4-earnings-151203271.html

http://finance.yahoo.com/echarts?s=BMY+Interactive#{"range":"5y","allowChartStacking":true}

Trade:
With BMY at 60.2
Jan '17 35/30 bull put spread for a net credit of $35
Yield = 35/465 = 7.5% in 340 days or 8.1% annualized
Prob = 95%
Expectation = .95(35) - .02(465) - .03(233) = 33.25 - 9.3 - 6.99 = 17

Price........... Profit / Loss......... ROM %
22.50.............. (465.00)........... -92.50%
30.00.............. (465.00)........... -92.50%
32.62.............. (202.60)........... -40.52%
34.65................... 0.00............... 0.00%
35.00................. 35.00............... 7.50%
40.00................. 35.00............... 7.50%
50.00................. 35.00............... 7.50%
60.00................. 35.00............... 7.50%
75.00................. 35.00............... 7.50%

Positive expectation and I believe it will fill.

Not everyone thinks Opdivo is all that great:

http://www.healthnewsreview.org/2015/12/opdivo-ads-vs-the-reality-of-stage-iv-cancer-treatment/

You have probably seen that ad on TV. One sobering fact is that it costs $150,000 for the initial treatment, and then about $14,000 a month.

That's a lot of money.

BMS is in a sobering business and eventually all of us will have to face the question of how we will handle our own end of life decisions.
 
Last edited:
OLD,

I like the process you use to choose your trades. I read many of them and exam the markets at the time you post. Many of these options have wide spreads and when I look at the midpoint, which I realize is often not "fair value", I have to wonder, how often you get the spreads off at the price you post.

Because these are not high volume spreads that are being traded by customers, you need to find a market maker that finds edge in doing the other side. I don't see an automated trader doing the other sides of these trades, becasue you are always pricing in an edge for you.

What percentage of your spreads do you get off at these prices?

Bob
 
The price I post is NOT a necessarily a price I have a high expectancy of getting a fill on. It is, rather, a price at which I am willing to accept the risk of the trade. As to how often I get a fill... it is probably close to 50%.

Probability of a fill is much greater around the time some news is current on the company. If I get a fill, so be it, I'll take the risk and let it run. If not fine. It costs me nothing to place an order and see if anybody bites. Sometimes I will have quite a few trades lurking to see if I get a fill and am often surprised when I do.

Remember that the odds are always against you. I think waiting for a trade where you expect to get an easy fill is wrong headed. The trade is much more likely to be in your favor (i.e. give you a profit) if a fill is VERY unlikely. The more unlikely the fill the more the trade is in your favor... if you get it. If not nothing lost.
 
Keep in mind that oldnemesis's threads are just trade IDEAS and not actual trades.

oldnemesis said:
As I have said many many times what I post are trade IDEAS.
More...


oldnemesis has never updated a thread with the final results - which IMO is vital. Trade entry is only 10% of the battle, the other 90% is how it progresses to exit. Without final trade results you end up back to square one.



:)
 
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