Conservative Options Trades

PEP:

http://finance.yahoo.com/news/pepsico-profit-hit-turnaround-efforts-214144070.html

http://www.bloomberg.com/news/2012-...ts-estimates-on-higher-prices.html?cmpid=yhoo

http://blogs.barrons.com/stockstowa...d-q2-spending-on-top-brands/?mod=yahoobarrons

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

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

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

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

Trade:
With PEP at 72.26
Jan 62.50/60 Bull Put Spread for a net credit of $18
Yield = 18/232 = 7.8% in 174 days or 16.3% annualized
Prob = 94.8%
Expectation = .948(18) - .02(232) - .032(116) = 17 - 4.64 - 3.7 = 8.7

pepsico.jpg
 
 
 
HUM:
http://www.bloomberg.com/news/2012-...st-as-medicare-costs-increase.html?cmpid=yhoo

http://finance.yahoo.com/news/humana-cuts-outlook-following-weak-224859543.html

http://news.investors.com/article/6...tate-earnings-this-week.htm?ven=yahoocp,yahoo

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

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

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

Bearish Trade:
Jan 85/87.5 bear call spread for $37
Yield = 37/213= 17.4% in 171 days or 37.1% annualized
Prob = 82%
Expectation = .82(37) - .15(213) - .03(106) = 30.3 - 31.9 - 3.2 = -4.8

Bullish Trade:
Jan 55/50 bull put spread for $55
Yield = 55/445 = 12.4% in 171 days or 26% annualized
Prob = 83%
Expectation = .83(55) - .08(445) - .09(222) = 45.6 - 35.6 - 20 = -10

Both at once??


220px-Humana.jpg


http://en.wikipedia.org/wiki/Humana
 
CWT:

http://www.fool.com/investing/etf/2012/06/15/make-money-in-promising-water-stocks.aspx

http://finance.yahoo.com/news/california-water-group-announces-second-204100557.html

http://www.fool.com/investing/gener...a-water-service-group-increases-sales-bu.aspx

http://finance.yahoo.com/q/pr?s=CWT+Profile

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

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

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

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

CWT pays a 3.4% dividend.

Trade:

Sell the Dec 17.50 put for .60... actually I sold it yesterday before it bounced.

(EEEKKS I just sold a naked put)

Yield = 60/1690 = 3.55% in 140 days or 9.26% annualized

My intent with this naked short put is to be put at 17.50. This will allow me to make the 3.4% dividend and sell calls for another 6% at least for a continued net ann yield in the area of 9.4%.

BTW I have tried repeatedly in the past to be put with CWT but it just doesn't happen. It's OK because the yield on the naked put is about equal to the dividend + CC.

We'll see if this time is the charm.

(Sorry but I don't have a headquarters picture for CWT)
 
Looks like danshirley has been chased back to his comfort zone in his private thread. It's too hot in the other option forums for him so he seeks safety in this one.

:)
 
 
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