Conservative Options Trades

This new software really sucks

DBA:

http://finance.yahoo.com/news/cool-...;_ylg=X3oDMTBhYWM1a2sxBGxhbmcDZW4tVVM-;_ylv=3

http://www.reuters.com/article/2014/08/06/us-ukraine-crisis-putin-food-idUSKBN0G61P020140806

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

Trade:
With DBA at 26.15
Jan '15 28/33 bear call spread for a net credit of $30
Yield = 30/470 = 6.38% in 159 days or 14.6% annualized
Prob = 75%
Expectation = .75(30) - .01(470) - .24(235) = 22.5 - 4.7 - 56.4 = -38.6


Price..........Profit / Loss..........ROM %
20.00.......... 30.00............... 6.38%
25.00.......... 30.00............... 6.38%
28.00.......... 30.00............... 6.38%
28.14.......... 16.40............... 3.28%
28.30............ 0.00............... 0.00%
32.51....... (420.80)........... -84.16%
33.00....... (470.00)........... -94.00%
35.00....... (470.00)........... -94.00%
40.00....... (470.00)........... -94.00%

The trade has a negative expectation based on previous price distribution but I am assuming that agricultural products prices will move down in distribution due to the record harvest and Putin ban. The full fall harvest will put pressure on ag prices into the end of December, and this pressure will be increased if Putin persists. The harvest is the important thing as the US exports very little ag directly to Russia, but there may be a push back effect from other countries which export more to Russia. I'm sure somebody has a model but I haven't seen it quoted as of yet.

It will make for a drab Russian winter and cheap food in Europe and the US. We could put more corn into ethanol and more soy beans into biodiesel but energy is also abundant in the US due to the surplus in natural gas.

Thus: bear market in agricultural products.

http://growingms.com/news/2014/07/corn-growers-feel-bite-bear-market/
 
MCD:

http://blogs.wsj.com/corporate-intelligence/2014/08/08/the-big-mac-is-in-a-big-slump/?mod=yahoo_hs

http://finance.yahoo.com/news/mcdon...sales-fall-2-5-percent-121235648--sector.html

http://www.nydailynews.com/life-style/eats/hamburglar-mcdonald-stinks-article-1.1852181

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

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

Trade:
With MCD at 93.55
Jan '15 100/105 bear call spread for a net credit of $55
Yield = 55/445 = 12.4% in 159 days or 28.4% annualized
Prob = 78%
Expectation = .78(55) - .09(445) - .12(223) = 42.9 - 40.1 - 26.8 = -24


Price..........Profit / Loss..........ROM %
70.00........... 55.00............. 12.40%
80.00........... 55.00............. 12.40%
95.00........... 55.00............. 12.40%
100.00......... 55.00............. 12.40%
100.55........... 0.00.............. 0.00%
105.00...... (445.00).......... -89.00%
110.00...... (445.00).......... -89.00%
120.00...... (445.00).......... -89.00%
130.00...... (445.00).......... -89.00%
 
TGT:

http://finance.yahoo.com/news/target-slumps-strong-sell-preliminary-194502455.html

http://blogs.barrons.com/stockstowa...re-wrong-on-target/?mod=yahoobarrons&ru=yahoo

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

Trade:
with TGT at 58.36

Jan '15 65/70 bear call spread for a net credit of $38
Yield = 38/462 = 8.2% in 158 days or 19% annualized
Prob = 80%
Expectation = .8(38) - .08(462) - .12(231) = 30.4 - 36.9 - 27.7 = -34.2

Price.............Profit / Loss...........ROM %
50.00.............38.00........................8.20%
55.00.............38.00........................8.20%
61.00.............38.00........................8.20%
65.00.............38.00........................8.20%
65.38.............0.00..........................0.00%
69.83.............(445.10)..................-89.02%
70.00.............(462.00)..................-92.40%
75.00.............(462.00)..................-92.40%
80.00.............(462.00)..................-92.40%
 
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CREE:

http://finance.yahoo.com/news/bank-america-responds-crees-report-120443857.html

http://finance.yahoo.com/news/cree-beats-q4-earnings-strong-132003750.html

http://www.thestreet.com/story/1284...urs-trading-today.html?puc=yahoo&cm_ven=YAHOO

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

trade:
With CREE at 44.74
Jan 55/60 bear call spread for a net credit of $50
Yield = 50/450 = 11.1% in 156 days or 26% annualized
Prob = 80%
Expectation = .8(50) - .13(450) - .07(225) = 40 - 58.5 - 15.8 = -34.3

Price.........Profit / Loss........ROM %
35.00............50.00.............11.11%
40.00............50.00.............11.11%
50.00............50.00.............11.11%
55.00............50.00.............11.11%
55.50..............0.00..............0.00%
58.20..........(270.00)..........-54.00%
60.00..........(450.00)..........-90.00%
65.00..........(450.00)..........-90.00%
75.00..........(450.00)..........-90.00%
 
AMZN:
http://finance.yahoo.com/news/mobile-payments-turn-amazon-amzn-221248020.html

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

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

Trade:
with AMZN at 326.28
Jan 400/405 bear call spread for a net credit of $50
Yield = 50/450 = 11.1% in 155 days or 26.1% annualized
Prob = 91%
Expectation = .91(50) - .08(450) - .01(225) = 45.5 - 36.0 - 2.3 = 7.2

Price...........Profit / Loss.........ROM %
244.71............50.00..........11.10%
294.90............50.00..........11.10%
347.74............50.00..........11.10%
400.00............50.00..........11.10%
400.50..............0.00............0.00%
400.58.............(7.70)...........-1.54%
405.00..........(450.00).........-90.00%
453.41..........(450.00).........-90.00%
506.25..........(450.00).........-90.00%
 
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NLY:

http://finance.yahoo.com/news/key-background-annaly-capital-biggest-145954347.html

http://247wallst.com/banking-financ...red-annaly-earnings-plus-key-analyst-upgrade/

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

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

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

Trade:
With NLY at 11.76
Jan '16 10/8 bull put spread for a net credit of $56
Yield = 56/144 = 39% in 516 days or 28% annualized
Prob = 89%
Expectation = .89(56) - .01(144) - .10(72) = 49.84 - 1.4 - 7.2 = 41.29

Price.......Profit / Loss......ROM %
6.00........(144.00).............-72.00%
7.67........(144.00).............-72.00%
8.00........(144.00).............-72.00%
9.43...........(1.30)...............-0.65%
9.44............0.00..................0.00%
10.00..........56.00...............39.00%
11.18..........56.00...............39.00%
12.94..........56.00...............39.00%
14.70..........56.00...............39.00%
 
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ABM:

http://online.barrons.com/news/arti...4580087500431277276?mod=yahoobarrons&ru=yahoo

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

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

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

Trade:
with ABM at 25.56
Jan 22.5/25 bull call spread for a net debit of $215
Yield = 35/215 = 16.3% in 151 days or 39.4% annualized

Price.........Profit / Loss.......ROI %
16.88...........(215.00)........-100.00%
19.77...........(215.00)........-100.00%
22.50...........(215.00)........-100.00%
22.81...........(183.60)..........-85.40%
24.65................0.00..............0.00%
25.00..............35.00............16.28%
25.86..............35.00............16.28%
28.90..............35.00............16.28%
31.95..............35.00............16.28%
 
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