Conservative Options Trades

BAX:

http://finance.yahoo.com/news/baxter-international-falls-pfizer-acquires-215502403.html

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

Trade:
With BAX at 74.69
Nov 80/85 bear call spread for a net credit of $49
Yield = 49/451 = 10.9% in 112 days or 35% annualized
Prob = 80%


Price..............Profit / Loss............ROM %
56.00............... 49.00................ 10.9%
65.00............... 49.00.................10.9%
75.00............... 49.00.................10.9%
80.00............... 49.00.................10.9%
80.49................. 0.00.................. 0.0%
85.00............. (451.00)............. -90.20%
90.00............. (451.00)............. -90.20%
95.00............. (451.00)............. -90.20%
100.00........... (451.00)............. -90.20%
 
PG:

http://finance.yahoo.com/news/p-g-tops-q4-earnings-172002352.html

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

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

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

Trade:
With PG at 79.65
Jan '15 70/65 bull put spread for a net credit of $27
Yield = 27/473 = 5.7% in 167 days or 12.5% annualized
Prob = 91%
Expectation = .91(27) - .02(473) - .07(236) = 24.57 - 9.46 - 16.52 =-1.41

Note: with the market and PG in pullback it might be good to wait a couple of days on this to see if a better trade will develop
 
GTIV:
http://finance.yahoo.com/news/gentiva-says-got-636m-buyout-152827607.html

http://www.bloomberg.com/news/2014-...ate-on-rival-acquisition-bids.html?cmpid=yhoo

http://finance.yahoo.com/news/gentiva-gtiv-worth-watching-stock-123144351.html

http://finance.yahoo.com/news/gentiva-health-services-announces-entry-204800728.html

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

Trade:
with GTIV at 18.13
Feb 15/12.5 bull put spread for a net credit of $20
Yield = 20/230 = 8.7% in 180 days or 17.6% annualized
(distribution statistics)
Prob = 79%
Expectation = .79(20) - .05(230) - .16(115) = 15.8 - 11.5 - 18.4 = -14.1

notes:

1. I use six months a my standard estimate of time to close

2. Distribution statistics are doubly invalid in buy-outs but it's interesting to see them (at least for me) anyway.

:-)
 
Janis:

When I was living and working in Philadelphia my friends and I would often travel up to the Greenwich Village clubs in New York City on a Friday night. We would spend the night drifting from club to club, getting drunk and drunker and end up sleeping in our cars until someone was sober enough to drive home.

In those days I was driving a Mustang Cobra that for a while had a Nitrous oxide injector in the trunk. When you drove that car it was hard to keep it under 100, so it made the trip to NYC quick, but you HAD to be sober or you were dead.

One Friday night we went up to see Janis Joplin and brought with us a bottle of Southern Comfort and an expensive crystal glass.
When we got into the club a couple of us got a table with an empty chair and we set the bottle and glass up with a bowl of ice at the empty chair. There was no doubt that this would draw Janice and she would sit with us for a while drinking our hooch.

After her first set Janice indeed came over and sat at the empty chair and proceeded to pour herself a drink, talk with us and get sloshed.
Talking with Janice was no revelation and the thing I remember most about that night was how small, vulnerable and sad a girl she was.
I remember at one time telling her she should drop out of her tour and come live with me and go to college at St. Joe's and become an English teacher. I told a lot of girls that in those days.

After a little while she was getting pretty drunk and the guitar player called me over and told me to lay off her, she would drink herself unconscous if we let her.

This made me feel pretty bad about what we were doing and when she went to do her next set I got the guys to leave and take the Southern Comfort with us.

Janice was just six months older than I was. She haunts me.

On October 4, 1970, producer Paul A. Rothchild became concerned when Joplin failed to show up at Sunset Sound Recorders for a recording session. Full Tilt Boogie's road manager, John Cooke, drove to the Landmark Motor Hotel in Hollywood where Joplin was staying. He saw Joplin's psychedelically painter Porche Cabriolet in the parking lot. Upon entering Joplin's room (#105), he found her dead on the floor beside her bed. The official cause of death was an overdose of heroin, possibly compounded by alcohol. Cooke believes that Joplin had accidentally been given heroin that was much more potent than normal, as several of her dealer's other customers also overdosed that week. Peggy Caserta and Seth Morgen had both failed to meet Joplin the Friday immediately prior to her death, October 2, and according to the book Going Down With Janis, Joplin was saddened that neither of her friends visited her at the Landmark Motor Hotel as they had promised.

https://www.youtube.com/watch?v=WXV_QjenbDw

http://blankonblank.org/interviews/janis-joplin-on-rejection/?gclid=CIPF1oe0-L8CFQUuaQodGrsAUQ

http://en.wikipedia.org/wiki/Janis_Joplin
 
NWN:
http://stockcharts.com/h-sc/ui?s=NWN

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

http://finance.yahoo.com/news/nw-natural-reports-first-quarter-103000616.html

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

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

Trade:
Mar 40/35 bull put spread for a net credit of $.45
Yield = 45/455 = 9.8% in 226 days or 16% annualized
Prob = 72%
Expectation = .72(45) - .05(455) - .23(228) = 32.4 - 22.75 - 52.44 = -42.8

Price................Profit / Loss................ROM %
25.00............... (455.00)................. -91.00%
30.00............... (455.00)................. -91.00%
35.00............... (455.00)................. -91.00%
37.17............... (238.30)................. -47.66%
39.55.................... 0.00..................... 0.00%
40.00................... 45.00.................... 9.80%
45.00................... 45.00.................... 9.80%
50.00................... 45.00.................... 9.80%
55.00................... 45.00.................... 9.80%
 
TM:
http://finance.yahoo.com/news/toyota-profit-nearly-5-percent-063603516.html

http://finance.yahoo.com/news/toyota-q1-profit-rise-beats-061607599.html

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

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

Trade 1:
With TM at 119.03
Jan 15 100/95 bull put spread for a net credit of $35
Yield = 35/465 = 7.6% in 163 days or 16.8% annualized
Prob = 91%
Expectation = .91(35) - .04(465) - .05(233) = 31.8 - 18.6 - 11.6 = 1.6

Trade 2:
Jan 16 80/75 bull put spread for a net profit of $50
Yield = 50/450 = 11.1% in 526 days or 7.7% annualized
Prob = 95%
Expectation = .95(50) - .03(450) - .02(225) = 47.5 - 13.5 - 4.5 = 29.5
 
ED:

http://finance.yahoo.com/news/consolidated-edison-beats-q2-earnings-135006284.html

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

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

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

Trade:
With ED at 56.28
Jan 50/47.5 bull put spread for a net credit of $30
Yield = 30/220 = 13.6% in 161 days or 30.9% annualized
Prob = 82%
Expectation = .82(30) - .10(220) - .08(110) = 24.6 - 22.0 - 8.8= -6.2


Price...........Profit / Loss........ROM %
35.00........... (220.00)....... -90.00%
40.00........... (220.00)....... -90.00%
45.00........... (220.00)....... -90.00%
49.24............. (46.40)....... -17.80%
49.70................ 0.00............ 0.00%
50.00.............. 30.00........... 11.11%
56.32.............. 30.00........... 11.11%
63.33.............. 30.00........... 11.11%
70.35.............. 30.00........... 11.11%
 
Windlesham1 said:
I find your fiath in probabilities disturbing Vader-seriously? When trading so far ahead you have literally 100% no clue
More...

Ha! Many have hassled him about that. Naysayer! Ignore. Ignore. Nothing conservative about the R/R.

Meanwhile, here's a song for oldnemesis. Wild music, baby.

 
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