Conservative Options Trades

CYS:

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

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

http://seekingalpha.com/article/192...violates-efficient-market-theory?source=yahoo

http://seekingalpha.com/article/176...r-q3-and-its-outlook-is-positive?source=yahoo

http://www.thestreet.com/story/1224...rpai-mtge-pwe-hts.html?puc=yahoo&cm_ven=YAHOO

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

Trade:
With CYS at 7.86
Sell the Sept 7.0 put for a net credit of $60
Yield = 60/700 = 8.57% in 231 days or 13.5% annualized

CYS currently pays a 16% annual dividend (pays quarterly)

Calls are also available to sell to raise income level.

Chances are good that we will be able to collect our 13.5% without ever buying the stock, but if we ARE put we should be able to continue collecting a good income level anyway.
 
PFE:

http://finance.yahoo.com/news/pfizer-beats-sales-profit-forecasts-124046200.html

http://finance.yahoo.com/news/pfizer-tops-earnings-revs-guides-135732579.html

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

Trade:
With PFA at 30.75
Sept 28/25 bull put spread for a net credit of $55
Yield = 55/245 = 22.45% in 234 days or 35.0% annualized
Prob = 73%
Expectation = .73(55) - .09(445) - .18(222) = 40.15 - 40.05 - 40.0 = -39.9


Price...................Profit / Loss.....................ROI %
18.75....................... (245.00) ....................-81.67%
22.53....................... (245.00).................... -81.67%
25.00....................... (245.00).................... -81.67%
26.51....................... (94.40)....................... -31.47%
27.45............................ 0.00............................. 0.00%
28.00.......................... 55.00.......................... 22.45%
30.48.......................... 55.00.......................... 22.45%
34.46.......................... 55.00.......................... 22.45%
38.44.......................... 55.00.......................... 22.45%
 
AMGN:

http://finance.yahoo.com/news/another-strong-earnings-beat-amgen-153005981.html

http://seekingalpha.com/article/197...r-and-oncology-pipeline-products?source=yahoo

http://finance.yahoo.com/news/amgen-4q-profit-leaps-30-234209873.html

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

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

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

AMGN pays a 2% annual dividend

Trade:
With AMGN at 120.49
Jan '15 82.5/77.5 bull put spread for a net credit of $34
Yield = 34/466 = 7.3% in 352 days or 7.6% annualized
Prob = 93%
Expectation = .93(34) - .04(466) -.03(233) = 31.62 - 18.64 - 6.99 = 5.99

Price.............................Profit / Loss...............ROI%
70.00............................. (466.00).................. -93.20%
75.00............................. (466.00).................. -93.20%
77.00............................. (466.00).................. -93.20%
80.00..............................(161.00).................. -32.20%
82.16..................................... 0.00......................... 0.00%
82.50................................... 34.00........................ 7.30%
85.00................................... 34.00........................ 7.30%
90.00................................... 34.00........................ 7.30%
95.00.................................. 34.00......................... 7.30%

Update: I actually got $40 on this AMGN trade boosting my yield to 40/460 = 8.7% or 9% annualized
 
LOW:

http://www.marketwatch.com/story/10-stocks-to-buy-instead-of-apple-2014-01-29?pagenumber=1

"Over the past couple of years, Lowe's stock has been on a very impressive price run. Based on a improving market and customer satisfaction creating very strong fundamentals, I believe any pullback in price is a buying opportunity. At current levels using the valuation metrics above, I have concluded that Lowe's is currently undervalued and have calculated it is trading at a 36.69% discount..."

http://seekingalpha.com/article/1968711-lowes-a-good-time-to-buy?source=yahoo

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

http://www.fool.com/investing/gener...ings-jump-34-on-recovering-home-improvem.aspx

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

Trade:

With LOW at 45.97
Jan '15 35/32 bull put spread for a net credit of $40
Yield = 40/260 = 15.4% in 351 days or 16% annualized
Prob = 88%
Expectation = .88(40) - .06(260) - .06(130) = 35.2 - 15.6 - 7.8 = 11.8


Price.............................Profit / Loss..................ROI %
25.00................................ (260.00)................ -86.67%
30.00................................ (260.00)................ -86.67%
32.00................................ (260.00)................ -86.67%
34.60......................................... 0.00..................... 0.00%
35.00....................................... 40.00................. 15.40%
37.00....................................... 40.00................. 15.40%
40.00........................................ 40.00................ 15.40%
50.00........................................ 40.00................ 15.40%
55.00........................................ 40.00................ 13.33%
 
GIS:

http://finance.yahoo.com/news/general-mills-kept-neutral-weak-225004818.html

http://finance.yahoo.com/news/general-mills-posts-lower-expected-122153684.html

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

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

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

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

Trade:
With GIS at 48.02
Jan '15 40/35 bull put spread for a net credit of $55
Yield = 55/445 = 12.4 % in 350 days or 12.9% annualized
Prob = 89%
Expectation = .89(55) - .02(445) - .09(223) = 48.95 - 8.9 - 20.07 = 20.0


Price..........................Profit / Loss.........................ROI %
25.00........................... (445.00)........................... -89.00%
30.00........................... (445.00)........................... -89.00%
35.00........................... (445.00)........................... -89.00%
39.45................................... 0.00.................................. 0.00%
40.00................................. 55.00............................... 12.40%
45.00................................. 55.00............................... 12.40%
50.00................................. 55.00............................... 12.40%
55.00................................. 55.00............................... 12.40%
 
AWR:

http://finance.yahoo.com/news/strong-buy-american-states-water-222503153.html

http://www.fool.com/investing/gener...fit-from-americas-crumbling-infrastructu.aspx

http://finance.yahoo.com/news/ameri...-031300170.html;_ylt=AwrBJSDpRO5SHGsATSuTmYlQ

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

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

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

Trade:
With AWR at 28.40

Sept 25/30 bull call spread for a net debit of $340


Price............................Profit / Loss......................ROI %
18.00.......................... (340.00)....................... -100.00%
20.00.......................... (340.00)....................... -100.00%
25.00.......................... (340.00)...................... -100.00%
26.14.......................... (226.40)......................... -66.59%
28.40.................................. 0.00............................... 0.00%
29.92............................ 152.40............................. 44.82%
30.00............................ 160.00............................. 47.06%
35.00............................ 160.00............................. 47.06%
37.50............................ 160.00............................. 47.06%
 
WEC:

https://www.moodys.com/research/Moo...PR_291787?WT.mc_id=NLTITLE_YYYYMMDD_PR_291787

http://finance.yahoo.com/news/wec-upgraded-outperform-210004096.html

http://finance.yahoo.com/news/wec-provides-financial-guidance-183003123.html

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

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

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

Trade:
With WEC at 42.19
Jul 40/35 bull put spread for a net credit of $80
Yield = 80/420 = 19.0% in 165 days



Price........................Profit / Loss...................ROI %
26.25......................... (420.00)....................... -84.00%
31.33......................... (420.00)....................... -84.00%
35.00......................... (420.00)....................... -84.00%
36.68......................... (251.60)....................... -50.32%
39.20.................................. 0.00............................. 0.00%
40.00................................ 80.00......................... 19.00%
42.00................................ 80.00......................... 19.00%
45.00 ............................... 80.00......................... 19.00%
50.00 ............................... 80.00......................... 19.00%
 
WMT:

http://finance.yahoo.com/news/wal-mart-looks-lower-q4-215005859.html

http://finance.yahoo.com/news/wal-mart-cuts-outlook-due-135719210.html

http://www.cnbc.com/id/101380735?__...hoo&doc=101380735%7cTime+to+close+Wal-Mart+st

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

Trade:
With WMT at 72.66
Jan '15 85/90 bear call spread for a net credit of $38
Yield = 38/462 = 8.22% in 347 days or 8.6% annualized
Prob = 84%
Expectation = .84(38) - .09(462) - .07(231) = 31.9 - 41.58 - 16.17 = -26


Price......................................Profit / Loss....................ROI%
55.00........................................ 38.00............................. 8.22%
65.00........................................ 38.00............................. 8.22%
75.00........................................ 38.00............................. 8.22%
85.00........................................ 38.00............................. 8.22%
85.38........................................... 0.00.............................. 0.00%
89.06...................................... (368.40)..................... -73.68%
90.00...................................... (462.00)...................... -92.40%
100.00................................... (462.00)...................... -92.40%
115.00................................... (462.00......................) -92.40%
 
http://www.cnbc.com/id/101381010

Many years ago I was working as a bench chemist at the Rhom and Haas research facility in King of Prussia just outside of Philadelphia.

I used to go to lunch at a Strawbridge's store at the nearby King of Prussia mall.

I used to go by myself so I could sit and have my soup and sandwich and read my Wall Street Journal in peace.

There was another guy who used to come in and do the same thing . I saw him there most days.

It turned out to be Jack Bogle. At the time he was just starting the Vanguard funds. We used to eat our soup and discuss the WSJ articles on the markets.

http://en.wikipedia.org/wiki/John_C._Bogle

http://en.wikipedia.org/wiki/Strawbridge's

267px-Phila8thMarket.jpg
 
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