Conservative Options Trades

 
OMG:
http://finance.yahoo.com/news/bear-day-om-group-omg-050020837.html

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

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

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

Trade:
With OMG at 26.49
Oct 25/20 bear put spread for a net debit of $45

Price........Profit / Loss......ROI %
15.00........455.00.........1011.11%
18.48........455.00.........1011.11%
20.00........455.00.........1011.11%
22.14........241.50...........536.67%
24.55............0.00..............0.00%
25.00.........(45.00)........-100.00%
25.79.........(45.00)........-100.00%
29.45.........(45.00)........-100.00%
33.11.........(45.00)........-100.00%
 
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MRK:
http://www.nytimes.com/2014/09/05/b...rug-for-cancer.html?partner=yahoofinance&_r=0

http://finance.yahoo.com/news/u-approves-merck-immune-stimulating-194459254.html

http://247wallst.com/healthcare-bus...n-cancer-drug-approval-really-means-to-merck/

"Keytruda is the first drug approved that inhibits the action of one of those brakes, a protein known as PD-1, or programmed death receptor 1."

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

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

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

Trade:
With MRK at 60.08
Jan '15 52.50/50 bull put spread for a net credit of $22
Yield = 22/228 = 9.6% in 133 days or 26.5% annualized
Prob = 94%
Expectation = .94(22) - .02(228) - .02(114) = 20.68 - 4.56 - 2.28 = 13.84

..Price...........Profit / Loss.........ROM %
....35.00............(228.00)........-91.20%
....45.00............(228.00)........-91.20%
....50.00............(228.00)........-91.20%
....52.28.................0.00............0.00%
....52.31................3.20............1.28%
....52.50...............22.00...........9.60%
....60.00...............22.00............9.60%
....65.00...............22.00............9.60%
....70.00...............22.00............9.60%
 
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MDT:

http://finance.yahoo.com/news/medtronic-poised-improved-q1-covidien-195504603.html

http://www.nytimes.com/2014/05/07/us/graying-of-america-is-speeding-report-says.html?_r=0

http://www.investopedia.com/stock-analysis/070114/your-best-best-medical-space-xlv-cov-mdt-fxh.aspx

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

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

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

Trade:
With MDT at 64.31
Jan '16 50/47.5 bull put spread for a net credit of $40
Yield = 40/210 = 19% in 495 days or 14% annualized
Prob = 93%
Expectation = .93(40) - .04(210) - .03(105) = 37.2 - 8.4 - 3.2 = 25.6

Price.........Profit / Loss.........ROM %
35.00............(210.00).......-84.00%
45.00............(210.00).......-84.00%
47.50............(210.00).......-84.00%
49.60.................0.00...........0.00%
50.00...............40.00..........19.00%
55.00...............40.00..........19.00%
60.00...............40.00..........19.00%
65.00...............40.00..........19.00%
70.00...............40.00..........19.00%
 
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AMGN:

http://finance.yahoo.com/news/amgen-edges-trial-results-224200564.html

http://finance.yahoo.com/news/amgen-seeks-eu-approval-pcsk9-210002420.html

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

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

Trade:
Apr '15 100/95 bull put spread for a net credit of $26
Yield = 26/474 = 5.5% in 221 days or 9.1% annualized
Prob = 98%
Expectation = .98(26) - .01(474) - .01(237) = 25.48 - 4.74 - 2.37 = 18.4

I already have a Jan spread on AMGN so for me this would be a half position because of the overlap
 
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SWHC:
http://www.businessweek.com/articles/2014-08-27/gun-sales-are-down#r=read
http://finance.yahoo.com/news/rid-smith-wesson-holding-swhc-104751305.html
http://finance.yahoo.com/q/ks?s=SWHC+Key+Statistics
http://finance.yahoo.com/q/bc?t=5y&s=SWHC&l=off&z=l&q=l&c=&ql=1&c=%5EGSPC
http://finance.yahoo.com/q/bc?t=5y&s=SWHC&l=off&z=l&q=l&c=&ql=1


Trade:
with SWHC at 10.47
Jan '16 15/17 bear call spread for a net credit of $35
Yield = 35/165 = 21% in 493 days or 15.7% annualized
Prob = 88%
Expectation = .88(35) - .06(165) - .06(82.5) = 30.8 - 9.9 - 4.95 = 15.9
 
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