Conservative Options Trades

 
 
BA:

http://finance.yahoo.com/news/fedex-buy-additional-aircraft-boeing-213036296.html
http://www.bizjournals.com/stlouis/...oised-to-double-cash-flow-in-3.html?ana=yfcpc
http://www.bizjournals.com/seattle/news/2012/06/27/boeing-preparing-for-possible-huge.html?ana=yfcpc
http://finance.yahoo.com/news/boeing-787-dreamliner-makes-philadelphia-220000123.html
http://www.bloomberg.com/news/2012-...h-cash-to-reward-shareholders.html?cmpid=yhoo

http://finance.yahoo.com/q/ks?s=BA+Key+Statistics
http://investing.money.msn.com/investments/financial-statements?symbol=BA
http://finance.yahoo.com/q/bc?s=BA&t=5y&l=on&z=l&q=l&c=

Trade:
Jan '13 50/45 bull put spread for $25
Yield = 25/475 = 5.25% in 202 days or 9.5% annualized
Prob = 97%
Expectation = .97(25) - .01(475) - .02(237) = 24.25 - 4.75 - 4.74 = 14.75
 
 
Yet another example of a stock trading at it's all time high.
I'll assume you are a "trend follower".
While I am also one who selects strikes OTM, and yours are certainly deep OTM, I'm not sure that alone is criteria enough for labeling the trades as "conservative".
Waiting for a pull back to tech support, along with a shorter expiration date, with time decay working for you sooner, would make your trades more conservative, while earning a higher annualized % return.
Just my 2 cents. No need to respond, as I know you are not into discussions.
 
CVS:

After looking further into CVS I am considering buying the stock with the intent of selling covered calls. Current ATM CC would yield about 12% annualized plus a 1.4% dividend.

Of course I would not actually buy the stock but would instead sell the naked put with the intent of being put.

.............Short Put premiums and Calcs.............

EP = effective price of stock if put
Prob = prob of Price < strike = prob of being put

Yield of the short put = premium/(margin - premium) <cash account> annualized

Expiration:Jan '13 (200 days):

with CVS at 47.81 sell naked put at indicated strike:

Strike.......Premium........Yield..........EP.........Prob
35...............55.............2.9%......34.45........2%
37...............68.............3.3%......36.32........3%
39...............89.............4.2%......38.11........9%
40.............107.............4.9%......38.93........12%
42.............132.............5.7%......40.68........22%
44.............175.............7.2%......42.25........27%
46.............235.............9.8%......43.65........46%
48.............310...........12.6%......44.90........60%
50.............415...........16.5%......45.85........73%

http://finance.yahoo.com/q/bc?s=CVS+Basic+Chart

All things considered I am inclined to sell the $40 put with the knowledge that CVS may well proceed to higher levels leaving my attempt to be put behind... as well as the usual danger of CVS proceeding to lower levels and leaving me holding the bag.

:-)

images
 
http://finance.yahoo.com/news/carmakers-report-strong-june-sales-161053206.html

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

http://finance.yahoo.com/q/bc?s=F+Basic+Chart&t=5d

http://finance.yahoo.com/q/bc?t=2y&s=F&l=on&z=l&q=l&c=&ql=1&c=^GSPC

http://finance.yahoo.com/q/bc?t=2y&s=F&l=on&z=l&q=l&c=&ql=1

Maybe F has some upside coming

e.g. with F at 9.60

Buy Sept $10 call for $35

Price .........P/L.......%
9.00........(35)......(100%)
10.00......(35)......(100%)
10.35........0..........0%
10.50........15.......43%
11.00........65......185%
11.50.......115......328%
12.00.......165......471%

ford_05crownvictoria_angularfront_Regular.jpg


(my daily driver... a gas guzzling V8)
 
XLF:
http://www.forbes.com/sites/etfchan...d-experiences-big-outflow-4/?partner=yahootix

http://www.forbes.com/sites/halahto...rything-top-regulator-says/?partner=yahoofeed

http://www.marketwatch.com/story/financials-drag-sp-down-led-by-jp-morgan-2012-07-05?siteid=yhoof2

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

Trade:

Jan '13 20/23 bear call spread for $17
Yield = 17/283 = 6% in 196 days or 11.2% annualized
Prob = 96%
Expectation = .96(17) - .01(283) - .03(141) = 16.32 - 2.83 - 4.23 = 9.26

note how this posting is completely opposite in outlook to the Ford post above.

F and XLF have diverged:
http://finance.yahoo.com/q/bc?t=1y&s=F&l=on&z=l&q=l&c=XLF&ql=1
 
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