Wednesday, October 21, 2009

GS - Put Calendar Trade - Oct 21 by Joseph





· GS reported earnings on 10/15 and price fell afterwards. Current price is 184.96
· Technical analysis: MACD bearish cross on 10/15. RSI near 50, and 5ema slight above 20ema, with down slope. 20ema flat. 50sma at 175. BB goes sideway, Upper BB band at 191.5, and Lower BB band at 177.5.
· IV is around 30%, near the low point in 2 years.
· Expected Price movement: Slightly bearish, with target of between 175 and 180 for the coming month


BTO Jan 2010, strike 180 put at 9.35
STO Nov 2009, strike 180 put at 3.9
Net debit 5.45
BE: 171.41 (down side) and 189.68 (upside)

PE: 20+ percent profit.
SE: If very bullish roll the short put up/out
If very bearish, roll the short put down/out
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2 comments:

  1. InnovestorOctober 21, 2009 at 8:08 AM

    Joseph,

    Good trade and analysis. Some further comments:

    GS actually reported good results but the stock went down.

    It is also a good idea to add a put calendar when the stock bounce down from resistance in a long term bullish trend. This is an ideal set up

    As with calendars, be on your feet and ready to adjust if trend turns very bullish or very bearish. You will win if trend is stagnant, slightly bullish and slightly bearish.

    ReplyDelete
  2. josephOctober 29, 2009 at 6:42 AM

    Exit most of the contracts with at 5.95 with 9% gain.

    ReplyDelete

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About Me

An engineer by training graduated with B.Sc (hons) and MBA from Strathclyde university in Glasgow, Scotland. Started as an engineer in R&D for 3 years with Philips. Then, worked with DuPont for 13 years. Last job was VP, Marketing for Asia Pacific. Left to start a number of companies in various segments which include a large electronic distribution, a VoIP provider, an internet trading portal in Australia,and an executive training consultancy firm. Have listed companies in NYSE, Australia Stock Exchange, Singapore Stock Exchange Main Board. I was on the Board of Directors for 1 company listed in Thailand, 1 in Singapore and 1 in Australia. Was in the senior management of a company listed in NYSE. Still holding major share positions in the VoIP and Executive training companies. Both are private companies.

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These articles merely reflect the opinions of this author and are by no means a guarantee of future economic conditions, market or stock performance. Though the author strives to provide accurate and relevant data, he sometimes relies on external sources and cannot assure the reader of the accuracy of these external sources. Additionally, these articles are provided for INFORMATIONAL PURPOSES ONLY and are NOT MEANT to provide investment advice to anyone. For investment advice, please consult your professional adviser.