P/E Compression (and dividend divergence) Trade -- Short NASDAQ (QQQ) / Long Dow Jones Industrials (DIA) [Equal Dollar]
Thesis: In a mini-deflationary event, dividend, low P/E stocks should outperform high P/E, low dividend stocks
Apple Mobile Phone Wars Trade -- Long Apple (AAPL) / Short Research in Motion (RIMM) [Equal Dollar]
Thesis: Apple's market share of the mobile phone market is only 5%. RIMM has not released a competitive phone in years -- old technology.
Ag Boom Trade -- Long Mosaic (MOS) / Short Whole Foods (WFMI) [Equal Dollar]
Thesis: Food input costs will continue to increase helping Mosaic's demand, pressuring margins of grocery chains like Whole Foods.
Exxon underperform Trade -- Long Suncor (SU) / Short ExxonMobil (XOM) [Equal Dollar]
Thesis: Exxon continues to barely replace reserves on non-acquisition basis. The only thing propping up the stock is it's cash flow and share buybacks. Puchase of XTO energy will pay dividends in the long run but I expect Exxon to underperform more highly levered players like Suncor.
Showing posts with label AAPL. Show all posts
Showing posts with label AAPL. Show all posts
Saturday, August 28, 2010
Saturday, May 8, 2010
Volatility high = Put premiums very high
If you are willing to own some big cap names here at 40% lower prices and still collect an option premium, there are some interesting opportunities out there.
Write an AAPL June $150 put for $0.80. AAPL is currently trading around $235 (36.2% stock price decline required to lose money on option). If you believe AAPL will not trade down to $150 by June 18th then this is a money maker.
Write a GOOG May $390 put for $1.00. GOOG is currently trading around $493 (20.8% stock price decline required to lose money on option). If you believe GOOG will not trade down to $390 by May 21st then this is a money maker.
Write a BRK.B May $70 put for $1.00. BRK.B is currently trading at $74 (7% stock price decline required to lose money on option). If you believe BRK.B will not trade down to $70 by May 21st then this is a money maker.
Write a BP June $42.50 put for $0.83. BP is currently trading at $49 (13.2% stock price decline required to lose money on option). If you believe BP will not trade down to $42.50 by June 18th then this is a money maker.
Write an AAPL June $150 put for $0.80. AAPL is currently trading around $235 (36.2% stock price decline required to lose money on option). If you believe AAPL will not trade down to $150 by June 18th then this is a money maker.
Write a GOOG May $390 put for $1.00. GOOG is currently trading around $493 (20.8% stock price decline required to lose money on option). If you believe GOOG will not trade down to $390 by May 21st then this is a money maker.
Write a BRK.B May $70 put for $1.00. BRK.B is currently trading at $74 (7% stock price decline required to lose money on option). If you believe BRK.B will not trade down to $70 by May 21st then this is a money maker.
Write a BP June $42.50 put for $0.83. BP is currently trading at $49 (13.2% stock price decline required to lose money on option). If you believe BP will not trade down to $42.50 by June 18th then this is a money maker.
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