Conservative Options Trades

T:
From above

http://www.marketwatch.com/story/10-stocks-to-beat-a-declining-market-2014-02-07?pagenumber=1

http://www.zacks.com/stock/news/121213/ATampT-Beats-on-Q4-Earnings-amp-Revs

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

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

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

http://finance.yahoo.com/q/bc?s=T+Basic+Chart&t=2y

T pays a 5.7% annual dividend

I'm willing to be put at $25 and sell calls until called.

Trade:

Oct 27/25 bull put spread for a net credit of $25
Yield = 25/175 = 14.3% in 250 days or 20.8% annualized
Prob = 90%
Expectation = .9(25) - .03(175) - .07(87.5) = 22.5 - 5.25 - 6.12 = 11.13


Price..................................Profit / Loss....................ROI %
20.00..................................... (175.00)................... -87.50%
24.00..................................... (175.00).................... -87.50%
25.00..................................... (175.00)..................... -87.50%
26.75............................................. 0.00......................... 0.00%
27.00........................................... 25.00...................... 14.30%
29.00........................................... 25.00...................... 14.30%
31.00........................................... 25.00...................... 14.30%
35.00........................................... 25.00...................... 14.30%
40.00........................................... 25.00...................... 14.30%
 
ECYT:

http://finance.yahoo.com/news/bull-day-endocyte-ecyt-060022832.html

http://finance.yahoo.com/news/endocyte-inc-ecyt-focus-stock-062100681.html

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

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

http://finance.yahoo.com/news/preclinical-data-support-endocytes-folate-210100411.html

http://www.thestreet.com/story/1208...arian-cancer-drug.html?puc=yahoo&cm_ven=YAHOO

http://finance.yahoo.com/news/narrower-expected-loss-endocyte-145003642.html

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

Trade:
with ECYT at 12.67
July 7.5/5 bull put spread for a net credit of $30
Yield = 30/220 = 13.6% in 156 days or 31.9% annualized
Prob = 72%
Expectation = .72(30) - .15(220) - .13(110) = 21.6 - 33 - 14.3 = -25.7


Price....................Profit / Loss......................ROI %
3.75.......................... (220.00) ....................-88.00%
5.00.......................... (220.00).................... -88.00%
6.25........................... (94.55)...................... -37.82%
7.20................................. 0.00............................ 0.00%
7.50............................... 30.00......................... 12.00%
8.00............................... 30.00......................... 12.00%
10.00............................ 30.00......................... 12.00%
12.00............................ 30.00......................... 12.00%
14.00............................ 30.00......................... 12.00%

Alternate trade:
with EYCT at 12.67
Jul 10/12.5 bull call spread for a net debit of $175

Price.............................Profit / Loss..................ROI %
7.50................................ (175.00)................... -100.00%
9.50................................ (175.00)................... -100.00%
10.00............................. (175.00)................... -100.00%
11.75..................................... 0.00............................ 0.00%
12.50................................... 75.00......................... 42.86%
13.00................................... 75.00......................... 42.86%
15.00................................... 75.00......................... 42.86%
17.00................................... 75.00......................... 42.86%
 
INTC:

There is so much blather on the internet about INTC it is hard to make a rational trade. To me the following graph reduces endless blah blah blah to essentials:

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

In mid January INTC missed expectations on earnings and gapped down. It then drifted down for a couple of weeks and has now risen again to the point where a trade might be in order.

http://finance.yahoo.com/news/intel-fourth-quarter-revenue-exceeds-210904920.html

http://www.marketwatch.com/story/in...ning-outlook-2014-01-16-1710308?siteid=yhoof2

http://blogs.barrons.com/techtrader...1-rev-view-in-line/?mod=yahoobarrons&ru=yahoo

http://blogs.barrons.com/techtrader...-numbers-say-bears/?mod=yahoobarrons&ru=yahoo

http://finance.yahoo.com/news/slumping-intel-cut-more-5-225424444.html

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

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

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

Trade:

With INTC at 24.7
Jul 27/29 bear call spread for a net credit of $27
Yield = 27/173 = 15.6% in 154 days or 37% annualized
Prob = 78%
Expectation = .78(27) - .09(173) - .13(86) = 21 - 15.5 - 11 = -5.5

Price...........................Profit / Loss.....................ROI %
18.00.............................. 27.00.......................... 15.60%
22.00.............................. 27.00........................... 15.60%
25.00.............................. 27.00........................... 15.60%
27.00............................. 27.00............................ 15.60%
27.27................................. 0.00.............................. 0.00%
29.00.......................... (173.00)....................... -86.50%
30.00.......................... (173.00)....................... -86.50%
33.00.......................... (173.00)....................... -86.50%
35.00.......................... (173.00)....................... -86.50%
 
KRFT:

http://finance.yahoo.com/news/kraft-misses-earnings-revs-again-134008183.html

http://finance.yahoo.com/news/krafts-4q-profit-rises-sales-220033872.html

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

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

Trade:

With KRFT at 53.97

Sept 60/62.5 bear call spread for a net credit of $20
Yield = 20/230 = 8.7% in 217 days or 14,6% annualized
Prob = (not computable because of the recent sale)


Price..............................Profit / Loss...............ROI %
45.00................................ 20.00........................ 8.70%
50.00............................... 20.00......................... 8.70%
55.00............................... 20.00......................... 8.70%
60.00............................... 20.00......................... 8.70%
60.20.................................. 0.00......................... 0.00%
62.50........................... (230.00).................. -92.00%
65.00........................... (230.00).................. -92.00%
70.00........................... (230.00).................. -92.00%
75.00........................... (230.00).................. -92.00%
 
UPS:

http://finance.yahoo.com/news/ups-hikes-dividend-213004349.html

http://finance.yahoo.com/news/ups-releases-4q-results-151800919.html

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

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

Trade:
with UPS at 97.24
Jan '15 77.5/72.5 bull put spread for a net credit of $38
Yield = 38/462 = 8.2% in 336 days or 8.9% annualized
Prob = 96%
Expectation = .96(38) - .01(462) - .03(231) = 36.5 - 4.62 - 6.93 = 25


Price................................Profit / Loss...................ROI %
65.00................................. (462.00)................... -92.40%
70.00................................. (462.00)................... -92.40%
72.50................................. (462.00).................... -92.40%
77.12.......................................... 0.00.......................... 0.00%
77.50........................................ 38.00......................... 8.20%
80.00........................................ 38.00......................... 8.20%
85.00........................................ 38.00......................... 8.20%
95.00........................................ 38.00......................... 8.20%
100.00..................................... 38.00......................... 8.20%
110.00..................................... 38.00......................... 8.20%
 
CPB:

http://www.usatoday.com/story/money/business/2014/02/14/campbell-soup-profit/5480333/

http://finance.yahoo.com/news/campbells-q2-earnings-outperform-193358534.html

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

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

Trade:
with CPB at 43.01
Jan '15 30/35 bull call spread for a net debit of $3.50
Yield = 150/350 = 42.8% in 334 days or 46.8% annualized
Prob that CPB will be above 35 = 84%
Expectation (given a fill): .84(150) - .04(350) - .12(175) = 126 - 14 - 21 = 91

This spread pricing is based on last pricing not on bid/ask. bid/ask pricing provides a negative return for this spread.

What's the prob that OptionsXpress , using their execution capabilities, can get this fill?? Unknown... costs nothing to try.

Assured fill spreads (e.g. bid/ask bull put spreads) yield about 7% annualized. This is not enough for me to make the trade.


Price..........................Profit / Loss................ROI %
22.50........................... (350.00)............... -100.00%
28.50........................... (350.00)................ -100.00%
30.00........................... (350.00)................ -100.00%
33.50................................... 0.00......................... 0.00%
34.82............................. 131.60...................... 37.60%
35.00............................. 150.00...................... 42.86%
41.13............................. 150.00...................... 42.86%
47.45............................. 150.00...................... 42.86%
53.76............................. 150.00...................... 42.86%
 
BA:

http://blogs.barrons.com/stockstowa...organ-stanley-says/?mod=yahoobarrons&ru=yahoo

http://blogs.barrons.com/stockstowatchtoday/2014/02/07/boeing-time-to-buy/?mod=yahoobarrons&ru=yahoo

http://finance.yahoo.com/news/boeing-outlook-sinks-stock-despite-204909846.html

http://finance.yahoo.com/news/boeing-q4-core-profit-29-132847313.html

http://www.marketwatch.com/story/bo...deliveries-2014-01-29-121033740?siteid=yhoof2

http://www.thestreet.com/story/1228...eted-on-wednesday.html?puc=yahoo&cm_ven=YAHOO

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?t=1y&s=BA&l=on&z=l&q=l&c=&ql=1&c=^GSPC

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

Boeing pays a dividend of 2.2% annualized

Trade:
With BA at 130.16
Jan '15 90/85 bull put spread for a net credit of $40
Yield = 40/460 = 8.7% in 333 days or 9.5% annualized
Prob = 97%
Expectation = .97(40) - .02(460) - .01(230) = 38.8 - 9.2 - 2.3 = 27

Price..................................Profit / Loss.........................ROI %
63.75.................................... (460.00)......................... -92.00%
82.74.................................... (460.00)......................... -92.00%
85.00.................................... (460.00).......................... -92.00%
89.60............................................. 0.00.............................. 0.00%
90.00.......................................... 40.00............................... 8.70%
100.00....................................... 40.00............................... 8.70%
120.00........................................ 40.00.............................. 8.70%
140.00........................................ 40.00.............................. 8.70%
160.00........................................ 40.00...............................8.70%

Better than Barron's recommendation to 'buy Boeing on weakness" ??
 
AAPL:

http://www.marketwatch.com/story/apple-buy-signals-have-surfaced-2014-02-14

http://wallstcheatsheet.com/technol...ocked-to-apple-in-fourth-quarter.html/?ref=YF

http://finance.yahoo.com/news/apples-1q-disappoints-investors-stock-005255190.html

http://finance.yahoo.com/news/apples-iphone-sales-china-targets-011748638.html

http://wallstcheatsheet.com/stocks/cramer-it-may-be-time-to-show-apple-some-love-again.html/?ref=YF

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

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

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

Trade:
with AAPL at 543.99
July 420/415 bull put spread for a net credit of $33
Yield = 33/467 = 7.1% in 151 days or 17.1% annualized
Prob = 97%
Expectation = .97(33) - .02(467) - .01(234) = 32.0 - 9.3 - 2.3 = 20.4


Price...............................Profit / Loss.............................ROI %
400.00.............................. (467.00)............................. -93.40%
410.00.............................. (467.00)............................. -93.40%
415.00.............................. (467.00)............................. -93.40%
419.67....................................... 0.00................................... 0.00%
420.00..................................... 33.00................................... 7.10%
440.00..................................... 33.00................................... 7.10%
460.00..................................... 33.00................................... 7.10%
480.00..................................... 33.00................................... 7.10%
500.00..................................... 33.00................................... 7.10%
 
Do we need a hedge?

http://blogs.marketwatch.com/thetel...bet-on-the-sp-500-to-the-tune-of-1-3-billion/

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

e.g.
With SPY at 184.02
Sept 180/165 bear put spread for a net debit of $402


Price..............................Profit / Loss...........................ROI %
123.75.............................. 1098.00.......................... 273.13%
144.15.............................. 1098.00.......................... 273.13%
165.00.............................. 1098.00.......................... 273.13%
165.62.............................. 1036.40.......................... 257.81%
175.98......................................... 0.00............................... 0.00%
180.00................................... (402.00)..................... -100.00%
187.09................................... (402.00)..................... -100.00%
208.56................................... (402.00)..................... -100.00%
230.03................................... (402.00)..................... -100.00%


How about SSO which is the double SPY ETF:

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

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

with SSO at 101.33

Sept 95/8O bear put spread for a net debit of $371

Price........................Profit / Loss...............ROI %
60.00......................... 1129.00................ 304.31%
72.79......................... 1129.00................ 304.31%
80.00......................... 1129.00................ 304.31%
86.26............................ 502.90................ 135.55%
91.29.................................. 0.00..................... 0.00%
95.00........................... (371.00)............ -100.00%
99.73........................... (371.00)............ -100.00%
113.20........................ (371.00)............ -100.00%
126.66........................ (371.00)............ -100.00%

Maybe George is just playing a Martingale strategy..... double your bet on each loss until you are right.
:-)
 
You must log in or register to reply here.
Back
Top