Conservative Options Trades

BTU:

http://finance.yahoo.com/news/obamas-climate-plan-takes-aim-202540276.html

http://www.watchlistnews.com/2013/06/17/peabody-energy-stock-rating-reaffirmed-by-zacks-btu/

http://finance.yahoo.com/q/bc?s=BTU&t=6m&l=off&z=l&q=l&c=

With BTU at 15.03
Trade #1
Buy the Jan '14 15 put and sell the Jan '14 13 put for a net debit of $96

Price...................P/L
10.......................104
12.......................104
14.04................... 0.0
15.......................(96)
17.......................(96)
20.......................(96)

Trade #2
Buy the Jan '14 15 call and sell the Jan '14 17 call for a net debit of $82

Price...................P/L
12......................(82)
15......................(82)
15.82..................0.0
16........................18
17.......................118
20.......................118

Trade #3
Sell the Jan '14 $10 put and buy the Jan '14 $7 put for a net credit of $35.

Price.......................P/L
15...........................35
10...........................35
9.............................(65)
7............................(265)
5............................(265)

A cogent argument can be made for all three trades.
:-)
 
Quote from oldnemesis:

SFD:

http://www.reuters.com/article/2013...rbssFinancialServicesAndRealEstateNews&rpc=43

http://www.fool.com/investing/gener...d-profit-crashes-63-but-it-doesnt-really.aspx

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

Trade:

Sell the Jan '15 $30 put and buy the Jan '15 $25 put for a net credit of $35
Yield = 35/465 = 7.54 % in 180 days or 15.3% annualized
(180 is the estimated time to close)
More...

Ge nemesis,

I didn't even know these sort of options trades existed. Very conservative.
 
CCL:

http://finance.yahoo.com/news/bear-day-carnival-corp-ccl-045511662.html

http://beta.fool.com/nmaithya/2013/...-is-a-sucker-r/39256/?source=eogyholnk0000001

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

http://www.nbcnews.com/video/rock-center/51377911#51377911

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

Trade:
Oct 38/43 bear call spread for a net credit of $50
Yield = 50/450 = 11.1% in 102 days or 39.8% annualized
Prob = 80%
Expectation = .8(50) - .03(450) - .17(225) = 40 - 13.5 - 38.25 = -12

(a credit of $55 would bring expectation to zero. This means that call options are a little underpriced... we are being paid a little low for the risk, consistent with a low vol environment. I will 'shop the spread' and see if the market will give us the better deal)
 
Quote from oldnemesis:

CCL:

http://finance.yahoo.com/news/bear-day-carnival-corp-ccl-045511662.html

http://beta.fool.com/nmaithya/2013/...-is-a-sucker-r/39256/?source=eogyholnk0000001

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

http://www.nbcnews.com/video/rock-center/51377911#51377911

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

Trade:
Oct 38/43 bear call spread for a net credit of $50
Yield = 50/450 = 11.1% in 102 days or 39.8% annualized
Prob = 80%
Expectation = .8(50) - .03(450) - .17(225) = 40 - 13.5 - 38.25 = -12

(a credit of $55 would bring expectation to zero. This means that call options are a little underpriced... we are being paid a little low for the risk, consistent with a low vol environment. I will 'shop the spread' and see if the market will give us the better deal)
More...

hello,
I tried to follow your strategy, but the gain is limited to $ 45 and the BEP is down to 9%.
 

Attachments

Quote from oldnemesis:

CCL:

http://finance.yahoo.com/news/bear-day-carnival-corp-ccl-045511662.html

http://beta.fool.com/nmaithya/2013/...-is-a-sucker-r/39256/?source=eogyholnk0000001

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

http://www.nbcnews.com/video/rock-center/51377911#51377911

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

Trade:
Oct 38/43 bear call spread for a net credit of $50
Yield = 50/450 = 11.1% in 102 days or 39.8% annualized
Prob = 80%
Expectation = .8(50) - .03(450) - .17(225) = 40 - 13.5 - 38.25 = -12

(a credit of $55 would bring expectation to zero. This means that call options are a little underpriced... we are being paid a little low for the risk, consistent with a low vol environment. I will 'shop the spread' and see if the market will give us the better deal)
More...

What do you think instead of a strategy like the one below, that the BEP down is the same but you have a greater gain if the price of the underlying stops more or less the values ​​of now?
 

Attachments

BA:

http://finance.yahoo.com/news/boeing-dreamliner-catches-fire-londons-231342973.html

http://www.marketwatch.com/story/us...fter-technical-issue-2013-07-12?siteid=yhoof2

http://finance.yahoo.com/news/boeing-books-orders-67-more-190234303.html

http://www.businessweek.com/article...-steady-when-tragedy-strikes?campaign_id=yhoo

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

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

http://www.youtube.com/watch?v=91L6p0AQvH8

http://www.youtube.com/watch?NR=1&v=tBJIBtY5YQo&feature=endscreen

Trade:

Jan '14 75/70 bull put spread for a net credit of $25
Yield = 25/475 = 5.26% in 188 days or 10.2% annualized
Prob = 97%
Expectation = .97(25) - .01(475) .02(235) = 24.25 - 4.7 - 4.7 = 14.85

(this is an evolving situation and Monday prices may be more or less favorable)
 
TSLA:

http://www.fool.com/investing/general/2013/07/16/tesla-motors-3-numbers-to-watch.aspx

http://www.cnbc.com/id/100890550?__...yahoo&doc=100890550|Tesla+shares+plunge+14+pe

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

Is it possible to have a 'Conservative Options Trade' on TSLA???


Trade:
Jan '15 40/35 bull put spread for a net credit of $75
Yield = 75/425 = 17.6% in 539 days or 12% annualized
Prob = 72.2%
Expectation = .72(75) - .23(425) - .05(213) = 54 - 97.7 - 10.6 = -54

(the expectation calculation is pure nonsense and simply reflects the extreme volatility of the TSLA stock since it announced its profitable quarter. This is now an event driven stock not a statistical distribution stock.)

http://money.cnn.com/2013/05/08/autos/tesla-earnings/index.html

http://www.youtube.com/watch?v=LoFVO31CbE0
 
MCD:

http://abcnews.go.com/Business/wireStory/mcdonalds-falls-short-warns-tough-year-19732582

http://www.usatoday.com/story/money/business/2013/07/22/mcdonalds-2q-earnings/2574169/

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

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

With MCD at 97.58

Trade #1:

Sell the Dec 105 call and buy the Dec 110 call for a net credit of $47
Yield = 47/453 = 10.4% in 150 days or 25% annualized
Prob = 78%
Expectation = .78(47) - .10(453) - .12(226) = 37 - 45 - 27 = -35

Price................P/L
75....................47
85....................47
95....................47
105..................47
105.47..............0
110.................(453)
115.................(453)
120.................(453)

Trade #2
Sell the Dec 85 Put and buy the Dec 80 put for a net credit of $32
Yield = 32/468 = 6.8% in 150 days or 16.6% annualized
Prob = 92%
Expectation = .92(32) - .02(468) - .06(234) = 29.4 - 9.4 - 14.04 = 6

Price................P/L
75...................(468)
80...................(468)
84.68.................0
85....................32
95....................32
105..................32
110..................32

Both together = an Iron Condor
 
 
CFX:

http://finance.yahoo.com/news/colfaxs-2q-earnings-beats-est-130619027.html

http://seekingalpha.com/article/151...ebt-laden-and-huge-insider-sales?source=yahoo

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

http://finance.yahoo.com/q/co?s=CFX+Competitors

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

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

http://finance.yahoo.com/q/bc?t=5y&s=CFX&l=off&z=l&q=l&c=&ql=1


With CFX at 52.48

Trade #1
Bear Put Spread
Buy the Dec 52.50 put and sell the Dec 50 put for a net debit of $150
Potential Yield = 100/150 = 67%

Trade #2
Bear Call Spread
Sell the Dec 60 call and buy the Dec 65 call for a net credit of $35
Yield = 35/465 = 7.53% in 146 days or 18.8% annualized
Prob = 82%
Expectation = .82(35) - .07(465) - .11(233) = 28.7 -32.55 - 25.6 = - 29

If the S&P continues to forge ahead probably CFX will also. If the market hesitates and takes a correction CFX would probably show an outsized pull back due to its high valuation.
 
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