Conservative Options Trades

WPZ:

http://www.thestreet.com/story/1323...d-by-fundamentals.html?puc=yahoo&cm_ven=YAHOO

http://realmoney.thestreet.com/arti...damentals?_ga=1.37526567.602116145.1438053771

http://finance.yahoo.com/echarts?s=WPZ+Interactive#{"range":"5y","allowChartStacking":true}

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

http://www.wallstreetdaily.com/2015/07/14/pipeline-merger-williams-companies/

Williams Partners L.P. is a subsidiary of Williams Companies, Inc.

Trade:
with WPZ at 45.63
sell March $40 put for a net credit of $235
Yield = 235/3765 = 6.34% in 235 days or 9.7% annualized
Prob = 63%

Price............... Profit / Loss......... ROM %
30.00................... (765.00).......... -19.13%
35.19................... (246.10)........... -6.15%
37.65........................ 0.00............. 0.00%
40.00..................... 235.00............ 6.34%
40.65..................... 235.00............ 6.34%
46.11..................... 235.00............ 6.34%
51.58..................... 235.00............ 6.34%

I will make this trade with the intent of buying WPZ at $40
WPZ currently yields 7.6%

If I don't want to buy WPZ and I want to limit the downside:

March 40/35 bull put spread for a net credit of $40
Yield = 40/460 = 8.7% in 235 days or 13.5% annualized
Prob = 63%

Price ..................Profit / Loss........... ROM %
26.25..................... (460.00).............. -92.00%
32.16..................... (460.00).............. -92.00%
35.00..................... (460.00).............. -92.00%
38.38..................... (122.20).............. -24.44%
39.60.......................... 0.00.................. 0.00%
40.00........................ 40.00.................. 8.70%
44.60........................ 40.00.................. 8.70%
50.82........................ 40.00.................. 8.70%
57.04........................ 40.00.................. 8.70%

Note: it may be well to wait for the coming interest rate increase before doing this trade.
 
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DOW:

http://www.forbes.com/sites/narrativescience/2015/07/21/dow-chemical-earnings-projected-to-increase/

http://www.streetinsider.com/Earnings/Dow+Chemical+(DOW)+Tops+Q2+EPS+by+8c/10744488.html

http://finance.yahoo.com/news/3-cheap-stocks-buy-now-211009465.html

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

http://finance.yahoo.com/echarts?s=DOW+Interactive#{"range":"5y","allowChartStacking":true}

Trade:
with DOW at 45.63
Jan 35/30 bull put spread for a net credit of $51
Yield = 51/449 = 11.4% in 171 days or 24% annualized
Prob = 89%

Price............. Profit / Loss........... ROM %
20.00................ (449.00).............. -89.80%
25.00................ (449.00).............. -89.80%
30.00................ (449.00).............. -89.80%
34.49..................... 0.00.................. 0.00%
35.00.................... 51.00................ 11.40%
37.00.................... 51.00................ 11.40%
40.00.................... 51.00................ 11.40%
50.00.................... 51.00................ 11.40%
57.00.................... 51.00................ 11.40%
 
DOW looks to have good expectancy:

probability finishing above 35.0: 0.90
probability finishing below 30.0: 0.02
probability between: 0.08
0.90(51) - 0.02(449) - 0.08(224) = 17.31
 
GSK:

http://finance.yahoo.com/news/glaxosmithkline-q2-beats-despite-advair-111044885.html

http://finance.yahoo.com/news/drugmaker-gsk-sees-earnings-growth-123006668.html

http://finance.yahoo.com/news/glaxo-gsk-beats-q2-earnings-123712680.html

http://healthland.time.com/2012/07/05/breaking-down-glaxosmithklines-billion-dollar-wrongdoing/

http://finance.yahoo.com/video/4-stocks-4-trades-gilead-162700096.html

http://finance.yahoo.com/news/glaxosmithkline-beats-profit-forecasts-despite-113423912.html

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

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

Trade:
With GSK at 42.62
Jan 40/37 bull put spread for a net credit of $55
Yield = 55/245 = 22.4% in 169 days or 48% annualized
Prob = 66%
Expectation = .66(55) - .17(245) - .17(123) = 36.3 - 42.6 - 20.9 = -27.2

Price.................. Profit / Loss............. ROM %
27.00..................... (245.00)................ -81.67%
32.00..................... (245.00)................ -81.67%
37.00..................... (245.00)................ -81.67%
37.81..................... (164.50)............... -54.83%
39.45.......................... 0.00................... 0.00%
40.00......................... 55.00................. 22.43%
42.96......................... 55.00................. 22.43%
45.00......................... 55.00................. 22.43%
50.00......................... 55.00................. 22.43%
 
CLX:

http://finance.yahoo.com/news/clorox-jumps-cleaning-4th-quarter-171349850.html

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

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

Trade:
With CLX at 114.83
Jan 100/95 bull call spread for a net credit of $25
Yield = 25/475 = 5.3% in 165 days or 11.6% annualized
Prob = 90%
Expectation = .9(25) - .04(475) -.06(238) =22.5 - 19.0 - 14.3 = -11

Price............. Profit / Loss............. ROM %
70.00................ (475.00).............. -95.00%
85.00................ (475.00).............. -95.00%
95.00................ (475.00).............. -95.00%
99.62.................. (13.10)............... -2.62%
99.75..................... 0.00.................. 0.00%
100.00.................. 25.00.................. 5.30%
115.00.................. 25.00.................. 5.30%
125.00.................. 25.00.................. 5.30%
150.00.................. 25.00.................. 5.30%
 
XOM:
http://finance.yahoo.com/news/tumbling-oil-prices-slam-profit-153251221.html

http://finance.yahoo.com/video/brent-falls-below-50-first-012019872.html

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

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

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

Trade:
with XOM at 78.06
Jan 90/95 bear call spread for a net credit of $30
Yield = 30/470 = 6.4% in 165 days or 14% annualized
Prob = 86%
Expectation = .86(30) - .075(470) - .06(235) = 25.8 - 35.3 - 14.1 = -24

Price............. Profit / Loss............. ROM %
60.00................... 30.00................... 6.40%
70.00................... 30.00................... 6.40%
80.00................... 30.00................... 6.40%
90.00................... 30.00................... 6.40%
90.30..................... 0.00................... 0.00%
94.42................ (412.50)............... -82.50%
95.00................ (470.00)............... -94.00%
100.00.............. (470.00)............... -94.00%
120.00.............. (470.00)............... -94.00%
 
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GMCR:

http://www.bloomberg.com/news/artic...ts-forecast-after-pod-demand-slows?cmpid=yhoo

http://finance.yahoo.com/news/keurig-plunges-3q-sales-says-205925659.html

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

http://finance.yahoo.com/echarts?s=GMCR+Interactive#{"range":"5y","allowChartStacking":true}

Trade:
With GMCR at 74.98
Jan 95/100 bear call spread for a net credit of $60
Yield = 60/440 = 13.6% in 163 days or 31% annualized
Prob = 80%
Expectation = .8(60) - .16(440) - .04(220) = 108 - 70.4 - 8.8 = 28.8

Price.................. Profit / Loss............... ROM %
55.00....................... 60.00.................... 13.60%
65.00....................... 60.00.................... 13.60%
75.00........................60.00.....................13.60%
85.00....................... 60.00.................... 13.60%
95.00....................... 60.00.................... 13.60%
95.60......................... 0.00..................... 0.00%
97.22..................... (161.60)................ -32.32%
100.00................... (440.00)................ -88.00%
110.00................... (440.00)................ -88.00%
125.00................... (440.00)................ -88.00%

Alternate trade:
With GMCR at 74.98
Jan 75/70 bear put spread for a net debit of $283
Yield = 217/500 = 43% in 163 days or 97% annualized
Prob = 51%

Price................. Profit / Loss............ ROI %
55.00................... 217.00................. 76.68%
65.00................... 217.00................. 76.68%
68.00................... 217.00................. 76.68%
70.00.................. 217.00.................. 76.68%
72.17..................... 0.00.................... 0.00%
75.00................. (283.00).............. -100.00%
80.00................. (283.00).............. -100.00%
85.00................. (283.00).............. -100.00%
95.00................. (283.00).............. -100.00%
 
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NWN:
http://www.msn.com/en-us/money/stockdetails/fi-126.1.NWN.NYS?symbol=NWN&form=PRFIEQ

http://finance.yahoo.com/echarts?s=NWN&t=2y&l=off&z=l&q=l&c=#{"range":"5y","allowChartStacking":true}

Trade:
with NWN at 43.78
DEC 40/35 bull put spread for a net credit of $35
Yield = 35/465 = 7.5% in 133 days or 21% annualized
Prob = 78%
Expectation = .78(35) - .025(465) - .195(232) = 27.3 - 11.6 - 45.2 = -29.5

Price................. Profit / Loss........ ROM %
25.00.................. (465.00).............. -93.00%
30.00.................. (465.00).............. -93.00%
35.00.................. (465.00).............. -93.00%
37.47.................. (218.30).............. -43.66%
39.65...................... 0.00................... 0.00%
40.00..................... 35.00.................. 7.50%
45.00..................... 35.00.................. 7.50%
50.00..................... 35.00.................. 7.50%
55.00..................... 35.00.................. 7.50%
 
TSLA:

http://www.nasdaq.com/article/tesla-key-takeaways-from-earnings-cm506780

http://www.nasdaq.com/article/tesla...-as-investors-question-its-ambitions-cm506083

http://www.reuters.com/article/2015/08/09/us-teslamotors-cash-insight-idUSKCN0QE0DC20150809

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

http://finance.yahoo.com/echarts?s=TSLA+Interactive#{"range":"5y","allowChartStacking":true}

Trade:
With TSLA at 242.51
Jan 300/305 bear call spread for a net credit of $65
Yield = 65/435 = 14.9% in 159 days or 34% annualized
Prob = 83%
Expectation = .83(65) - .16(435) - .01(217) = 53.9 - 69.6 - 2.3 = -18

Price.................. Profit / Loss............. ROM %
181.88................... 65.00.................... 14.90%
220.14................... 65.00.................... 14.90%
260.42................... 65.00.................... 14.90%
300.00................... 65.00.................... 14.90%
300.65.................... 0.00....................... 0.00%
300.70................... (4.70).................... -0.94%
305.00................... (435.00)................ -85.10%
340.97................... (435.00)................ -85.10%
381.25................... (435.00)................ -85.10%
 
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