Conservative Options Trades

 
 
TLT:

z




TLT continues to be effective as a hedge on my stock positions. Unfortunately I was too cheap to buy a big enough position to keep me 100% hedged.... I am getting about 40% hedging which more or less matches the size of the TLT position.
 
http://stockcharts.com/h-sc/ui?s=spy

So we are rapidly retracing the bullish run up that started in January of this year. I never understood the basis for that run up and don't understand what has changed... except maybe the realization that the run-up was unjustified in the first place.

Europe is and has been a major concern which is not going away any time soon. Massive amounts of debt remain to be repudiated and imposed austerity measures imply new recessionary pressures.

All of my positions were structured with the expectation of this drop and no critical price level has been breached in any of my positions so far.

As the market moves to a new posture it is tempting to consider some new adaptive trades such as selling bear call spreads since the top of the run-up will undoubtedly be a major resistance point should the market reverse itself yet again. I have a couple on tap and I might post one or two over the week end.

I have been watching AAPL:

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

Which I would say looks really really toppy.... but when the complexities of AAPL's future are reviewed it is way too complex for me to place a bet of any sort. Some people are saying that's it for AAPL, but other's say there is a lot more to go on the up side. What I know is that the chart looks toppy but the valuation is very mild... still I might take a look at a bear call spread. When the market hits a down mood it's hard for anything to move up.

Where's that TV they're talking about??

Just to be in tune with the rest of the board:

Gamma, Delta , Vega....
and
Aphla Phi Omega (my old fraternity)

:-)
 
CPB

http://www.forbes.com/sites/narrati...ngs-preview-campbell-soup-2/?partner=yahootix

http://finance.yahoo.com/news/earnings-preview-campbell-soup-report-144704684.html

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

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

http://finance.yahoo.com/q/bc?t=5y&s=CPB&l=on&z=l&q=l&c=&ql=1&c=^DJI

http://finance.yahoo.com/q/bc?s=CPB&t=5y&l=on&z=l&q=l&c=

CPB pays a dividend of 3.5%

Trades:
Bear Call Spread:
40/45 for net credit of $75
Yield = 75/425 = 17.6% in 243 days or 26% annulized
Prob = 87%
Expectation= .87(75) - .03(425) - .1(213) = 65 - 13 - 21 = 31


Bull Put Spread:
28/25 for net credit of $25
Yield = 25/275 = 9.1% in 243 days or 13.6% annulized
Prob = 92%
Expectation = .92(25) - .04(275) - .04(137) = 23 - 11 - 5 = 7
 
http://guitar.best-movies-music-onl...s-joplin-down-on-me-generation-club-nyc-1968/
http://www.youtube.com/watch?v=mO6305TQapA

When I was in my mid twenties and working like a dog all week in Philadelphia my friends and I would drive up to New York City on a friday night and go to the clubs in Manhatten.

We would come back late Saturday... or maybe Sunday.

One trip I especially remember we went to see Janis Joplin and Jimi Hendrix. That night Janis sat at our table and got wasted... and then did her set.

A different time and a different life.
 
 
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