Friday, November 13, 2009

ANF Bull put by Joseph




ANF reports earnings today. It beats expectation, and expected to be profitable in the next 4-6 quarters by analysts.
Stock gapped up this morning now at $40.

STO Nov 39 put 0.55
BTO Nov 35 put at 0.05
=====================
Net Credit 0.5
Max Risk: 4 - 0.5 = 3.5
ROR = 0.5/3.5 = 14% in 7 days.

BE: $38.5
PE: let both options expired worthless.
SE: Accept assignment at cost base $38.5. Turn into covered call/collar trade.
Posted by at

4 comments:

  1. InnovestorNovember 13, 2009 at 7:55 PM

    Joseph,

    Seems like a good trade!

    With Nov expiration about 1 week ago, a 50 cents credit for a spread of 4 is not bad.

    Be ready for a temporary pullback and SP may go ITM and you have to assume ownership and collar it.

    It should not be a problem as the outlook for this stock is quite positive.

    ReplyDelete
  2. InnovestorNovember 13, 2009 at 7:56 PM

    Comment by Ted:

    A break out like this would make me do a calendar call diagonal. Bull put risk is a brief pull back for profit taking.

    ReplyDelete
  3. josephNovember 20, 2009 at 9:34 AM

    Bought back Nov 39 put at $0.05. Don't want to take any risk of being assigned (though low probablity) and ANF gaps down next Monday.

    ReplyDelete
  4. InnovestorNovember 20, 2009 at 10:58 AM

    Joseph,

    It is a good conservative idea. There is a possibility that ANF will break down on Monday. Now, it stands above the break away gap support at 39. If it fails, the whole trade will be down.

    I tried closing but was not filled. I cancelled it to see whether I will be assigned. The whole market is having some strengths and ANF short term 30 mins are recovering. So, my bull put may expire.

    If not, when I am assigned on Monday, I will simply sell the stock away. I will not collar this stock.

    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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