Conservative Options Trades

.JNJ:
http://www.thestreet.com/story/1316...and-selling-merck.html?puc=yahoo&cm_ven=YAHOO

http://www.investopedia.com/stock-a...st-important-numbers-jnj.aspx?partner=YahooSA

http://www.investopedia.com/stock-a...ockbusters-jnj-achn-gern.aspx?partner=YahooSA

http://finance.yahoo.com/news/j-j-multiple-myeloma-drug-113000929.html

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

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

Trade:
With JNJ at 98.59
Jan 85/82.5 bull put spread for a net credit of $32
Yield = 32/218 = 14.6% in 224 days or 24% annualized
Prob = 93%
Expectation = .93(32) - .04(218) - .03(109) = 29.8 - 8.7 - 3.3 = 17.8

Price............ Profit / Loss......... ROM %
65.00............... (218.00)........... -87.20%
75.00............... (218.00)........... -87.20%
82.50............... (218.00)........... -87.20%
84.68.................... 0.00................ 0.00%
85.00................... 32.00.............. 14.60%
90.00................... 32.00.............. 14.60%
95.00................... 32.00.............. 14.60%
110.00................. 32.00.............. 14.60%
125.00................. 32.00.............. 14.60%
 
oldnemesis said:
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%
More...

Nice
 
T:
http://247wallst.com/investing/2015/06/09/jefferies-sees-5-top-value-stocks-to-buy-now/

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

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

Trade:
With T at 34.60
Jan 30/27 bull put spread for a net credit of $40
Yield = 40/260 = 15.4% in 220 days or 25.5% annualized
Prob = 83.5%
Expectation = .84(40) - .05(260) - .11(130) = 33.6 - 13 - 14.3 = 6.3

Price........... Profit / Loss......... ROM %
20.00............. (260.00)............. -86.67%
25.00............. (260.00)............. -86.67%
27.00............. (260.00)............. -86.67%
29.31.............. (29.20).............. -9.73%
29.60................. 0.00................ 0.00%
30.00............... 40.00................. 15.40%
35.00............... 40.00................. 15.40%
40.00............... 40.00................. 15.40%
45.00............... 40.00................. 15.40%

I'm willing to be put at 30.
 
8:30 am China Mobile Games to be acquired by Pegasus Investment Holdings for US$22.00 per ADS (CMGE) : CMGE, the largest publisher and a leading developer of mobile games in China, announces that it has entered into a definitive agreement to be acquired by Pegasus Investment Holdings for US$22.00 per ADS. The board of directors unanimously approved the Merger Agreement and resolved to recommend that the company's shareholders vote to authorize and approve the Merger Agreement.

http://finance.yahoo.com/news/inplay-briefing-com-055139997.html#cmge

Trade:
With CMGE closing at 21.09
Sept 20/17.5 bull put spread for a net credit of $15
Yield = 15/235 = 6.4% in 101 days or 23% annualized
Prob =?
Expectation = ?

Price........... Profit / Loss......... ROM %
13.00.............. (235.00)........... -94.00%
15.00.............. (235.00)........... -94.00%
17.50.............. (235.00)........... -94.00%
18.34.............. (151.00)........... -60.40%
19.85................... 0.00................ 0.00%
20.00................. 15.00................ 6.40%
21.00................. 15.00................ 6.40%
23.00................. 15.00................ 6.40%
25.00................. 15.00................ 6.40%

I don't actually take these baby trades but some people do. When M&A is high you can get a whole portfolio of them pretty quickly.
 
BBY:

http://finance.yahoo.com/news/best-buy-bby-stock-solid-124212053.html

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

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

Trade:
With BBY at 34.44
Jan 22.50/19.50 bull put spread for a net credit of $15
Yield = 15/285 = 5.2% in 216 days or 8.9% annualized
Prob = 98%
Expectation = .98(15) - .01(285) - .01(143) = 13.5 - 2.9 - 1.4 = 9.2

Price................ Profit / Loss............. ROM %
15.00.................. (285.00)................ -95.00%
17.50.................. (285.00)................ -95.00%
20.08.................. (226.30)................ -75.43%
22.34....................... 0.00.................... 0.00%
22.49..................... 15.00.................... 5.20%
25.00..................... 15.00.................... 5.20%
30.00..................... 15.00.................... 5.20%
35.00..................... 15.00.................... 5.20%
40.00..................... 15.00.................... 5.20%

A VERY conservative trade.
 
oldnemesis said:
BBY:

http://finance.yahoo.com/news/best-buy-bby-stock-solid-124212053.html

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

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

Trade:
With BBY at 34.44
Jan 22.50/19.50 bull put spread for a net credit of $15
Yield = 15/285 = 5.2% in 216 days or 8.9% annualized
Prob = 98%
Expectation = .98(15) - .01(285) - .01(143) = 13.5 - 2.9 - 1.4 = 9.2

Price................ Profit / Loss............. ROM %
15.00.................. (285.00)................ -95.00%
17.50.................. (285.00)................ -95.00%
20.08.................. (226.30)................ -75.43%
22.34....................... 0.00.................... 0.00%
22.49..................... 15.00.................... 5.20%
25.00..................... 15.00.................... 5.20%
30.00..................... 15.00.................... 5.20%
35.00..................... 15.00.................... 5.20%
40.00..................... 15.00.................... 5.20%

A VERY conservative trade.
More...
I found it very difficult to get fills at the prices you quote here. Do you trade them eventually with your cash account?
 
The prices I quote here are prices listed by my options broker (OptionsXpress). They are computer chosen by OptionsXpress (Schwabb) based on Bid/Ask price and size as well as Last fill price and size.

I also find that sometimes the market moves away from these prices and then fills are hard to obtain. For my purposes if fills do not come at the pries quoted, because my expectation is based on that price or better, I will pass on the trade.

At other times I will place a limit order at better than calculated and will get an immediate fill. It depends on who is waiting for what and why.

I never ever take a fill at worse than the calculated. I would rather pass.

Also... sometimes it can take quite a while to get a favorable fill. I will sometimes wait for several days before a favorable fill is obtained, or come back to a passed trade after the market has moved.

I would rather get a fill I have waited for than one that pops right through. If the MM's rush to fill my trade I wonder what they know that I don't.

Please note that this is trade discovery. In presenting these trades there is no guarantee that I have taken the trade presented. Sometimes, because of market conditions, or the state of my own portfolio (e.g. how much risk I am currently holding) I may not even try to get a fill on the trade presented.

On the BBY trade I say it is a VERY conservative trade. This means that I would be lucky to get it... but it's possible. Just look at the probability: 98%. The MM's are seeing the same probability.

I have been waiting for a fill on BBY all day today. No Luck. I will probably try again next week.

If I get a fill... good. If not... too bad.

Update: Actually on BBY I just looked and I got half the trade filled (IB)... I'll try again next week.

Update: I noted that I got a half fill on IB. I find that I DID NOT present this trade through OptionsXpress. The reason for that is the commission size and the number of contracts. PERHAPS if I had presented the trade through OptionsXpress I would have gotten a complete fill. OptionsXpress uses a separate process and 'dark pool' markets which sometimes (but not always) gives them an advantage in getting spreads filled.
 
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FDX:

http://finance.yahoo.com/news/fedex-fdx-misses-q4-earnings-131601031.html

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

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

Trade:
with FDX at 176.82
Oct 195/200 bear call spread for a net credit of $60
Yield = 60/440 = 13.6 % in 121 days or 41.1% annualized
Prob = 82
Expectation = .82(60) - .13(440) - .05(220) = 49.2 - 57.2 - 11.0 = -19

Price............. Profit / Loss........... ROM %
135.00.................. 60.00................... 13.60%
155.00.................. 60.00................... 13.60%
175.00.................. 60.00................... 13.60%
195.00.................. 60.00................... 13.60%
195.60.................... 0.00.................... 0.00%
200.00................ (440.00)................ -86.40%
210.00................ (440.00)................ -86.40%
225.00................ (440.00)................ -86.40%
250.00................ (440.00)................ -86.40%
 
CXW:
http://finance.yahoo.com/news/cca-reports-first-quarter-2015-201500961.html

http://www.marketwatch.com/story/15...cks-with-yields-of-up-to-13-2015-06-16?page=2

http://finance.yahoo.com/q/pr?s=CXW+Profile

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

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

Trade:
with CXW at 34.57
Dec 30/27 bull put spread for a net credit of $48
Yield = 48/252 = 19.0% in 184 days or 38% annualized
Prob = 85%
Expectation = .85(48) - .05(252) - .1(126) =40.8 - 12.6 - 12.6 = 15.6

Price............... Profit / Loss......... ROM %
20.00................. (252.00)................. -81.00%
25.00................. (252.00)................. -81.00%
27.00................. (252.00)................. -81.00%
29.30................. (22.40).................... -7.47%
29.52.................... 0.00....................... 0.00%
30.00.................. 48.00...................... 19.00%
33.00.................. 48.00...................... 19.00%
38.00.................. 48.00...................... 19.00%
40.00.................. 48.00...................... 19.00%
 
ORCL:

http://finance.yahoo.com/news/oracle-misses-street-4q-forecasts-202742354.html

http://finance.yahoo.com/news/oracle-profit-sales-miss-estimates-201248978.html

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

http://finance.yahoo.com/echarts?s=ORCL+Interactive#{"range":"1d","allowChartStacking":true}

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

Trade:
With ORCL at 44.91
Jan 52.50/55 bear call spread for a net credit of $30
Yield = 30/220 = 13.6% in 212 days or 23.5% annualized
Prob = 81%
Expectation = .81(30) - .13(220) - .06(110) = 24.3 - 28.9 - 6.6 = -11.2

Price.................. Profit / Loss........... ROM %
33.00....................... 30.00................ 13.60%
40.00....................... 30.00................ 13.60%
47.50....................... 30.00................ 13.60%
52.50....................... 30.00................ 13.60%
52.80......................... 0.00................. 0.00%
54.58..................... (178.10)............ -71.24%
55.00..................... (220.00)............ -88.00%
65.00..................... (220.00)............ -88.00%
70.00..................... (220.00)............ -88.00%
 
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