BMY bull put spread on the weekly options
Oct 33/32.5, credit of 0.15. I risk losing 0.35 for a gain of 0.15, so a 43% return, based on the way I calculate my % returns for spreads. As long as the price doesn't drop more than 0.08 during this beginning of the dividend run, I make out like a bandit.
I'll probably sell more tomorrow, even at a lower credit, unless someone gives me reason to think this is a bad play. If it is, I want to know. Thoughts?
I'm wondering how much of this pop is due to news about BMY partnering with Vanderbilt U % the Micheal J fox foundation for Parkinsons research as opposed to OPEX and the divi run.If it's because of the news we still may get another buck for the divi run next week I'm holding till at least next friday and maybe OCT 1.I missed out on AGNC run past 36;I want to milk this one for as much as safely possible.
Would you plan to sell the spread before Oct 2 (BMY ExDiv), or let the spread expire?
Keeping in mind I'm less experienced than a lot of folks on here when it comes to options: I will take a guess that by using a spread, you're making it a little tougher on yourself with the BMY ex-div rapidly approaching but the Options Ex not being until Oct 19.
It seems to me that the max value on a spread isn't reached until Options Ex (or very close) so if you want the full .15c you have to hold & wait until near then (long after BMY has gone ex-div with corresponding pull-back in stock price)... If you try to buy back the Oct 33 leg before Op Ex you'll find it has a few cents of value left in it.
It's early in the morning and the kids are poking me to make 'em breakfast so I'm a bit rushed & could be off-base on this.
BMY +31c right now as I type this so certainly we are all off to a great start this morning and you've got some buffer building on your bull put spread from yesterday!
Kids fed, and now I've had a chance to do a quick re-read of your 9/21 msg. Noticed now that you mentioned weeklies, so I am guessing you meant the September (28th) 33/32.5 Put Spread, whereas you wrote Oct 33/32.5?
In which case, disregard my previous post.. Your Sep28th strat seems fine to me!