Conservative Options Trades

SPY:

http://www.marketwatch.com/story/it...mer-rally-in-stocks-2015-05-22?dist=afterbell
http://blogs.barrons.com/focusonfunds/2015/05/26/3-reasons-why-stocks-are-sinking/
http://www.reuters.com/article/2015/05/26/us-markets-global-idUSKBN0OB01520150526
http://www.cbc.ca/news/business/janet-yellen-warns-on-high-stock-market-valuations-1.3063837
http://www.usatoday.com/story/money/2015/05/26/stocks-summer-outlook/27782449/

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

TRADE:
With SPY at 210.70
Sept 225/230 bear call spread for a net credit of $36
Yield = 36/464 = 7.75% in 115 days or 24.6% annualized
Prob = 85%
Expectation = .85(36) - .08(464) - .07(232) =30.6 - 37.1 - 16.2 = -22.7

Price............... Profit / Loss.......... ROM %
160.00................ 36.00.................... 7.75%
180.00................ 36.00.................... 7.75%
210.00................ 36.00.................... 7.75%
225.00................ 36.00.................... 7.75%
225.36.................. 0.00.................... 0.00%
230.00.............. (464.00)............... -92.80%
235.00.............. (464.00)............... -92.80%
250.00.............. (464.00)............... -92.80%
275.00.............. (464.00)............... -92.80%

By expectation it's too early to put in this bearish position. The graph looks a little bearish but can always reverse. I think the market is psychologically ready for a correction so I may take the trade anyway. If you wait until the trade is too obvious it's obvious to everybody and there's no money left in it. The key is that 225 call. Somebody is willing to pay .55 for it so maybe I should take him up on it.
 
TWC:
http://finance.yahoo.com/news/charter-buying-time-warner-cable-155719505.html

http://www.forbes.com/sites/dorothy...-dunk/?utm_campaign=yahootix&partner=yahootix

http://www.latimes.com/entertainmen...harter-time-warner-20150527-story.html#page=1

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

Trade:
With TWC at 182.38
March 170/165 bull put spread for a net credit of $60
Yield = 60/440 = 13.6% in 1 year or 13.6% annualized
Prob=?
Expectation = ?

Price................... Profit / Loss................ ROM %
125.00.................... (440.00).................... -86.40%
150.00.................... (440.00).................... -86.40%
160.00.................... (440.00).................... -86.40%
165.00.................... (440.00).................... -86.40%
169.40......................... 0.00........................ 0.00%
170.00........................ 60.00...................... 13.60%
180.00........................ 60.00...................... 13.60%
200.00........................ 60.00...................... 13.60%
210.00........................ 60.00...................... 13.60%
 
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SFXE:

http://www.latimes.com/entertainmen...tertainment-to-go-private-20150526-story.html

http://www.msn.com/en-us/money/stockdetails/fi-126.1.SFXE.NAS?symbol=SFXE&form=PRFIEQ

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

Trade:
Dec 5/2.5 bull put spread for a net credit of $25
Yield = 25/225 = 11.1% in 180 days or 22.2% annually
Prob = ?
Expectation = ?

Price.............. Profit / Loss.......... ROM %
1.75.................. (225.00)............... -90.00%
2.00.................. (225.00)............... -90.00%
2.50.................. (203.50)............... -81.40%
3.50.................. (115.20)............... -46.08%
4.48.................... (26.80)............... -10.72%
4.75....................... 0.00.................... 0.00%
5.00...................... 25.00................. 11.10%
6.00...................... 25.00................. 11.10%
6.50...................... 25.00..................11.10%
 
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EROC:

http://www.fool.com/investing/gener...ds-eagle-rock-energy-partners-lp-soaring.aspx

http://www.reuters.com/article/2015/05/21/eagle-rock-ma-vanguard-idUSL3N0YC5SN20150521

http://www.msn.com/en-us/money/stockdetails/fi-126.1.EROC.NAS?symbol=EROC&form=PRFIEQ

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

Trade:
Sell Jan '17 2.5 put for a net credit of $55
Yield = 55/195 = 28.2% in 217 days or 47% annualized
Prob = 99%

Price................ Profit / Loss.......... ROM %
0.00......................(195.00)...........-78.00%
1.00.......................(95.00)..............-38.00%
1.88...................... (7.50)............... -3.00%
1.95........................ 0.00................. 0.00%
2.17....................... 21.50................ 8.60%
2.47....................... 52.10............... 20.84%
2.50....................... 55.00............... 28.20%
2.78....................... 55.00................28.20%
3.08....................... 55.00................28.20%
 
ALTR:
http://nypost.com/2015/05/28/intel-nears-15b-deal-to-purchase-altera/

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

Trade:
with ALTR at 46.97
Sept 35/30 bull put spread for a net credit of $60
Yield = 60/440 = 13.6% in 112 days or 44% annualized
Prob = ?
Expectation = ?

Price ................Profit / Loss .........ROM %
20.00 ...................(440.00) .............-88.00%
25.00 ...................(440.00) .............-88.00%
30.00 ...................(440.00) .............-88.00%
34.40 ........................0.00 .................0.00%
35.00 .......................60.00 ...............13.60%
40.00 .......................60.00 ...............13.60%
45.00 .......................60.00 ...............13.60%
50.00 .......................60.00 ...............13.60%
55.00 .......................60.00 ...............13.60%
 
BSX:
http://finance.yahoo.com/news/boston-scientific-ordered-pay-100-153115157.html

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

http://www.msn.com/en-us/money/stockdetails/fi-126.1.BSX.NYS?symbol=BSX&form=PRFIEQ

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

TRADE:
With BSX at 18.27
Jan 20/23 bear call spread for a net credit of $54
Yield = 54/246 = 22% in 231 days or 34.7% annualized
Prob = 72%

Price............ Profit / Loss......... ROM %
13.70................. 54.00 .............22.00%
16.59................. 54.00 .............22.00%
19.63................. 54.00 .............22.00%
20.00................. 54.00 .............22.00%
20.54................... 0.00 ..............0.00%
22.67............... (213.00) .........-71.00%
23.00............... (246.00)......... -82.00%
25.71............... (246.00)......... -82.00%
28.75............... (246.00)......... -82.00%
 
BMY:
http://www.wsj.com/articles/new-can...how-promise-1432922592?ru=yahoo?mod=yahoo_itp

http://www.marketwatch.com/story/br...ting-drug-trial-data-2015-05-29?siteid=yhoof2

http://www.msn.com/en-us/money/stockdetails/fi-126.1.BMY.NYS?symbol=BMY&form=PRFIEQ

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

Trades:
with BMY at 64.6
Trade #1
Dec 75/77.5 bear call spread for a net credit of $25
Yield = 25/225 = 11.1% in 201 days or 20.2% annualized
Prob = 82%
Expectation = .82(25) - .13(225) - .05(112) = 20.5 - 29.2 - 5.6 = -14.3

Price............. Profit / Loss.......... ROM %
45.00.................. 25.00................ 11.10%
55.00.................. 25.00................ 11.10%
65.00.................. 25.00................ 11.10%
75.00.................. 25.00................ 11.10%
75.25.................... 0.00.................. 0.00%
77.31................ (205.90)............. -82.36%
80.00................ (225.00)............. -90.00%
85.00................ (225.00)............. -90.00%
90.00................ (225.00)............. -90.00%

Trade #2
Dec 57.5/55 bull put spread for a net credit of $27
Yield = 27/223 = 12.1% in 201 days or 22.0% annualized
Prob = 73%
Expectation = .73(27) - .20(223) - .07(111) = 19.7 - 44.6 - 7.8 = -32.7

Price.................... Profit / Loss............. ROM %
40.00........................ (223.00)............... -89.20%
45.00........................ (223.00)............... -89.20%
55.00........................ (223.00)............... -89.20%
56.81.......................... (41.90)............... -16.76%
57.23............................. 0.00................... 0.00%
57.50............................ 27.00................. 12.10%
65.00............................ 27.00................. 12.10%
70.00............................ 27.00................. 12.10%
80.00............................ 27.00................. 12.10%
 
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http://blogs.reuters.com/breakingviews/2015/06/01/why-the-oil-price-will-fall-again/

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

Trade:
Jan '16 25/30 bear call spread for a net credit of $48
Yield = 48/452 = 10.6% in 227 days or 17% annualized
Prob = 80%
Expectation = .8(48) - .06(452) - .14(226) = 38.4 - 27.12 - 31.64 = -20 = not great but not unfair

Price.....Profit / Loss.......ROM %
15.00....... 48.00.............. 9.60%
20.00....... 48.00.............. 9.60%
24.00....... 48.00.............. 9.60%
25.00....... 48.00.............. 9.60%
25.48......... 0.00.............. 0.00%
28.62..... (313.50)......... -62.70%
30.00..... (452.00)......... -90.40%
33.00..... (452.00)......... -90.40%
37.50..... (452.00)......... -90.40%
 
UNH:
http://finance.yahoo.com/news/unitedhealth-tops-street-1q-forecasts-100940976.html

http://finance.yahoo.com/news/unitedhealth-returns-more-shareholders-hikes-164004416.html

http://www.msn.com/en-us/money/stockdetails/fi-126.1.UNH.NYS?symbol=UNH&form=PRFIEQ

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

Trade:
With UNH at 116.54
Jan 90/87.5 Bull put spread for a net credit of $25
Yield = 25/225 = 11.1% in 225 days or 18% annualized
Prob = 95%
Expectation = .95(25) - .03(225) - .02(113) = 23.8 - 6.75 - 2.26 = 14.8

Price.............. Profit / Loss......... ROM %
70.00................ (225.00)............. -90.00%
80.00................ (225.00)............. -90.00%
87.50................ (225.00)............. -90.00%
89.75..................... 0.00.................. 0.00%
90.00................... 25.00................ 11.10%
95.00................... 25.00................ 11.10%
100.00................. 25.00................ 11.10%
110.00................. 25.00................ 11.10%
120.00................. 25.00................ 11.10%
 
HCN:
http://finance.yahoo.com/news/health-care-reit-hcn-rating-192507782.html

http://finance.yahoo.com/news/hcn-completes-750-million-senior-210100494.html

http://finance.yahoo.com/news/health-care-reit-reports-1q-113955537.html

http://finance.yahoo.com/q/is?s=HCN

http://finance.yahoo.com/echarts?s=HCN+Interactive#{"range":"2y"}

Trade:
With HCN at 69.62
Jan 55/50 bull put spread for a net credit of $40
Yield = 40/460 = 8.7% in 224 days or 14.2% annualized
Prob = 92.7%
Expectation = .927(40) - .02(460) - .06(230) = 37 - 9.2 - 13.8 = 14

Price........... Profit / Loss......... ROM %
37.00............. (460.00)............. -92.00%
47.00............. (460.00)............. -92.00%
50.00............. (460.00)............. -92.00%
54.60.................. 0.00................. 0.00%
55.00................. 40.00................. 8.70%
60.00................. 40.00................. 8.70%
65.00................. 40.00................. 8.70%
70.00................. 40.00................. 8.70%
80.00................. 40.00................. 8.70%
 
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