Conservative Options Trades

[oldnemesis]

UNH:

http://www.marketwatch.com/story/in...ses-boom-in-sector-2014-05-29?dist=tcountdown

http://stockcharts.com/freecharts/perf.php?UNH,AET,CI,HUM,WLP

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

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

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

Trade:
with UNH at 79.37
Jan '15 65/62.5 bull put spread for a net credit of $25
Yield = 25/225 = 11.1% in 231 days or 17.6% annualized
Prob = 95.6%
Expectation = .956(25) - .02(225) - .024(113) = 23.9 - 4.5 - 2.7 = 16.7


Price.....................Profit / Loss.....................ROM %
45.00...................... (225.00)....................... -90.00%
55.00...................... (225.00)...................... -90.00%
62.50...................... (225.00)...................... -90.00%
64.75............................... 0.00............................ 0.00%
65.00............................ 25.00......................... 11.10%
70.00............................ 25.00......................... 11.10%
75.00............................ 25.00......................... 11.10%
80.00............................ 25.00......................... 11.10%
85.00............................ 25.00......................... 11.10%

 

[oldnemesis]

weekend off... better luck next week.... I hope

http://www.youtube.com/watch?v=y066TkPcxM4

 

[oldnemesis]

http://www.marketwatch.com/story/junk-bonds-turn-up-the-risk-for-retirees-2014-05-29

A low risk, high yield strategy:

TLT:

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

Trade: Jan '16 90/85 bull put spread for a net credit of $75
Yield = 75/425 = 17.64% in 592 days = 10.88% annualized
Prob = 96%
Expectation = .96(75) - .015(425) - .025(212) = 72 - 6.4 - 5.3 = 60.3
Expected annualized yield = 60.3/425= 14.2 in 592 days or 8.7%

In terms of dividends TLT itself is yielding 3.03%

 

[oldnemesis]

UNH:

http://finance.yahoo.com/news/unitedhealth-down-sell-204507881.html

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

Trade:
with UNH at 79.47
Jan'15 90/95 bear call spread for a net credit of $63
Yield = 63/437 = 14.4 % in 228 days or 23.1% annualized
Prob = 86%
Expectation = .86(63) - .06(437) -.08(218) = 54.2 - 26.2 - 17.4 = 10.6

 

[oldnemesis]

HSH:

http://finance.yahoo.com/news/hillshire-talk-tyson-pilgrims-pride-102834959.html

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

Trade:

Jan '15 45/35 bull put spread for a net credit of $35
Yield = 35/965 = 3.6% in 180 days or 7.4% annualized.
Prob = 98%
Expectation = .98(35) - .02(1000)= 34.3 - 20 = 14.3

 

[oldnemesis]

Tiananmen:

It is the 25th anniversary of Tiananmen Square:

http://www.youtube.com/watch?v=YeFzeNAHEhU

http://www.reuters.com/article/2014/06/03/us-china-tiananmen-idUSKBN0EE0WN20140603

http://www.cnn.com/2014/06/02/world/asia/china-guo-jian-detained/

http://www.youtube.com/watch?v=HNtA8RZ1FAA

 

[oldnemesis]

PHH:

http://finance.yahoo.com/news/bear-day-phh-corp-phh-050027558.html

http://www.thestreet.com/story/12703055/1/phh-corp-stock-downgraded-phh.html?puc=yahoo&cm_ven=YAHOO

https://www.moodys.com/research/Moo...PR_300947?WT.mc_id=NLTITLE_YYYYMMDD_PR_300947

http://finance.yahoo.com/news/weakness-seen-phh-corporation-phh-105147775.html

http://finance.yahoo.com/news/phh-corporation-announces-first-quarter-200500783.html

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

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

Trade:

With PHH at 23.73
Nov 25/30 bear call spread for a net credit of $80
Yield = 80/420 = 19% in 149 days or 46.7% annualized


Price...............Profit / Loss..............ROM %
17.00................ 80.00.................. 19.00%
20.00................ 80.00.................. 19.00%
25.00................ 80.00.................. 19.00%
25.56................ 24.10.................... 4.82%
25.80.................. 0.00.................... 0.00%
29.54.............. (373.90)............... -74.78%
30.00.............. (420.00)............... -84.00%
35.00.............. (420.00)............... -84.00%
37.50.............. (420.00)............... -84.00%

 

[oldnemesis]

http://www.telegraph.co.uk/history/...matic-original-footage-of-D-Day-invasion.html

http://www.telegraph.co.uk/history/...erans-Association-hanging-up-our-colours.html

 

[oldnemesis]

FL:

http://finance.yahoo.com/news/foot-locker-beats-q1-earnings-133004499.html

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

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

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

Trade:
with FL at $49.94
Jan 43/40 bull put spread for a net credit of $40
Yield = 40/260 = 15.38% in 219 days or 26% annualized
Prob = 81%
Expectation = .81(40) - .10(260) - .09(130) = 32.4 - 26.0 - 11.7 = -5

Price................Profit / Loss............ROM %
30.00............... (265.00).............. -88.33%
35.00............... (265.00).............. -88.33%
40.00............... (265.00).............. -88.33%
42.65.................... 0.00.................. 0.00%
42.77................... 12.30................. 4.10%
43.00................... 35.00................ 15.38%
49.94................... 35.00................ 15.38%
55.00................... 35.00................ 15.38%
60.00................... 35.00................ 15.38%

http://www.youtube.com/watch?v=foyZteDSWCk
zen

 

[jimmyjazz]

Why only a $40 credit? optionsXpress is reporting NBBO of $0.35/$0.85. In my experience, they usually fill pretty close to the middle ($60). This obviously raises the expected profit.