Conservative Options Trades

BCS and more on XLF:

http://online.barrons.com/article/SB50001424053111904317504577494901432326104.html?mod=BOL_hpp_dc

http://finance.yahoo.com/news/barclays-penalized-libor-probe-153518844.html

http://finance.yahoo.com/news/hagens-berman-files-class-action-005400444.html

http://seekingalpha.com/article/706731-the-latest-crisis-now-unfolding-on-wall-street?source=yahoo

http://economix.blogs.nytimes.com/2012/07/05/lie-more-as-a-business-model/?partner=yahoofinance

http://finance.yahoo.com/q/bc?s=BCS&t=1y&l=off&z=l&q=l&c=

http://finance.yahoo.com/q/bc?s=BCS&t=5d&l=off&z=l&q=l&c=

Trade:

With BCS at 10.27

Jan '13 12.50/15 bear call spread for $35
Yield = 35/215 = 16.3% in 194 days or 30.6% annualized
Prob: N/A
Expectation:N/A

A topical but not 'conservative' trade. There's a tremendous amount of information being generated and I can only get a general sense of where things are probably going.

The 'conservative' thing to do would be to stay far away from the global banks for at least 10 years... maybe more.

I believe the XLF trade above is more conservative in my usual sense of the word.
 
http://finance.yahoo.com/news/regulator-220-million-missing-iowa-023341172.html

The problem with the world is that it is full of people.

When is late too late?

Hello darkness, my old friend
I've come to talk with you again
Because a vision softly creeping
Left its seeds while I was sleeping
And the vision that was planted in my brain
Still remains
Within the sound of silence

In restless dreams I walked alone
Narrow streets of cobblestone
'Neath the halo of a street lamp
I turned my collar to the cold and damp
When my eyes were stabbed by the flash of a neon light
That split the night
And touched the sound of silence

And in the naked light I saw
Ten thousand people, maybe more
People talking without speaking
People hearing without listening
People writing songs that voices never share
And no one dared
Disturb the sound of silence

"Fools", said I, "You do not know
Silence like a cancer grows
Hear my words that I might teach you
Take my arms that I might reach you"
But my words, like silent raindrops fell
And echoed
In the wells of silence

And the people bowed and prayed
To the neon god they made
And the sign flashed out its warning
In the words that it was forming
And the sign said, "The words of the prophets are written on the subway walls
And tenement halls"
And whispered in the sounds of silence
 
 
SPY:

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

Trade:
With SPY @ 136.09
AUG 132/135/140 'broken wing' butterfly for a net credit of $30

39 days to expiration

Price................P/L
130.................30
132.................30
135..............327
136..............224
138................0
140..............(170)
145..............(170)
 
SPY Ctd:
Filled the butterfly at $15 credit
http://stockcharts.com/h-sc/ui?s=spy

This gives the following:

with SPY at 134.80 and 39 days to expiration

Price................P/L
130.................15
132.................15
135...............312
136...............213
138................0
140..............(185)
145..............(185)


AGP Ctd:

Filled AGP at $50 credit
http://stockcharts.com/h-sc/ui?s=agp

Jan '14 90/85 bull put spread for a net of $50
Yield = 50/450= 11.1% in ? days... 10 months at the outside
Annualized > 11.1*360/300 = 13.2% annualized
Prob = NA
Expectation = NA

I don't post fills per se but I was asked.
 
PG:
http://www.marketwatch.com/story/procter-gamble-lands-in-ackmans-sights-2012-07-12?siteid=yhoof2

http://finance.yahoo.com/news/procter-gamble-pg-050003399.html

http://finance.yahoo.com/news/bearish-procter-gamble-181515565.html

http://seekingalpha.com/article/714301-procter-gamble-is-about-to-slow-way-down?source=yahoo

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

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


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

Trade: with PG at 63.70
Jan '13 47.50/50/75/77.50 Iron Condor for a net credit of $20
Yield = 20/230 = 8.7% in 190 days or 16.7% annualized
Prob = 3% downside/8% upside = 92%
Expectation = .92(20) - .05(230) - .03(115) = 18.4 - 11.5 - 3.5 = 3.4
P&G isn't going anywhere.

http://en.wikipedia.org/wiki/Iron_condor
 
Now I'm curious do you manage these trades. What I mean by that is that you gain exposure to gamma do you roll down or up and strikes.. Or do you have like a break off points where you close down position or have you even thought about it
 
Quote from cdcaveman:

Now I'm curious do you manage these trades. What I mean by that is that you gain exposure to gamma do you roll down or up and strikes.. Or do you have like a break off points where you close down position or have you even thought about it
More...

My sense is most of these are not actual trades. Thus nothing to manage.
Merely hypothetical... "what if's".
Nothing wrong with that, as a learning tool, to look back on.
I just have a difficult time taking the timing of most of these trades seriously.
But I could be wrong.
 
Quote from cdcaveman:
Or do you have like a break off points where you close down position or have you even thought about it
More...

My guess is that these trades are meant to expire worthless. The credit is small and time decay doesn't really start until the last month.


Quote from Put_Master:

My sense is most of these are not actual trades. Thus nothing to manage.
Merely hypothetical... "what if's".
Nothing wrong with that, as a learning tool, to look back on.
I just have a difficult time taking the timing of most of these trades seriously.
But I could be wrong.
More...


Looks like the tree is starting to bear fruit. The trades that danshirley posts are mostly - if not all - long term trades and you can have a quick look at the results. I did a quick look and found zero losing trades, but because of the high risk/reward ratio in the individual trades you do have to be alert as one bad trade can wipe out 10 good trades.

So far though it looks good.


:)
 
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