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Option Idea Which Must Be Executed Before Market Closes November 1st

Option Idea Which Must Be Executed Before Market Closes November 1st

I am sorry to send you a second email message today, but I need to hurry because it will disappear tomorrow.  It involves Gilead Sciences (GILD)

Gilead (GILD) announces earnings on Tuesday, November 1st after the close.  The post-announcement options are extremely expensive.  Implied Volatility (IV) for the 04Nov16 series is 60 compared to 34 for the 16Dec16 series which expires six weeks later.  The company has fallen 32% from its 52-week high and pays a dividend of 2.5% and has a p/e of only 6.4 which should provide some level of support. Expectations are for lower sales and earnings.  These facts support the idea that a big drop in stock price is unlikely after the announcement.  This trade will make money if the stock is flat or goes up by any amount (a maintenance requirement of $400 per spread, less the amount of the credit, will result):

Buy To Open 1 GILD 16Dec16 70 put (GILD161216P70)

Sell To Open 1 GILD 04Nov16 74 put (GILD161104P74) for a credit of $.25  (buying a diagonal)

We bought 5 contracts of exact spread today in our portfolio that trades on earnings announcements.  It will make a maximum gain if the stock closes on Friday exactly at $74.  Any price higher than that will also result in a profit.  The stock should be able to fall about $2 before any loss should appear on the downside.

This is the risk profile graph for this spread, assuming that IV for the 16Dec16 series falls by 5 after the announcement:

GILD Risk Profile Graph Oct 31 2016

GILD Risk Profile Graph Oct 31 2016

The theoretical risk of this investment is $375 (the $400 maintenance requirement less the $25 received).  However, since we plan to close the spread on Friday and there will still be 6 weeks of remaining life for the 16Dec16 70 put, the actual risk is far less than $375.  That is the amount that you will tie up in your account for this week, however.

You can see that if the stock is flat or moderately higher on Friday, you will make a profit of about $100 on your $475 investment, or about 25%.  Not bad for a week.

If the stock falls by more than $2, the graph indicates that a loss would result.  Since we believe the low valuation and the high dividend rate both provide a solid support level for the stock, we don’t believe the stock will fall by very much, and we feel good about making this investment.

 Lowest Subscription Price Ever

As a Halloween special, we are offering the lowest subscription price than we have ever offered – our full package, including several valuable case study reports, my White Paper, which explains my favorite option strategies in detail, and shows you exactly how to carry them out on your own, a 14-day options tutorial program which will give you a solid background on option trading, and two months of our Saturday Reports full of tradable option ideas.  All this for a one-time fee of $39.95, less than half the cost of the White Paper alone ($79.95).

For this lowest-price-ever $39.95 offer, click here, enter Special Code HWN16 (or HWN16P for Premium Service – $79.95).

 If you are ready to commit for a longer time period, you can save even more with our half-price offer on our Premium service for an entire year.  This special offer includes everything in our basic service, and in addition, real-time trade alerts and full access to all of our portfolios so that you can Auto-Trade or follow any or all of them.  We have several levels of our Premium service, but this is the maximum level since it includes full access to all nine portfolios which are available for Auto-Trade.  A year’s subscription to this maximum level would cost $1080.  With this half-price offer, the cost for a full year would be only $540.  Use the Special Code MAX16P.

 This is a time-limited offer.  You must order by midnight tonight, October 31, 2016.  That’s when the half-price offer expires, and you will have to go back to the same old investment strategy that you have had limited success with for so long (if you are like most investors).

This is the perfect time to give you and your family the perfect Halloween treat that is designed to deliver higher financial returns for the rest of your investing life.

I look forward to helping you survive Halloween by sharing this valuable investment information with you at the lowest price ever. It may take you a little homework, but I am sure you will end up thinking it was well worth the investment.

Happy trading.

Terry

P.S.  If you would have any questions about this offer or Terry’s Tips, please call Seth Allen, our Senior Vice President at 800-803-4595.  Or make this investment in yourself at the lowest price ever offered in our 15 years of publication – only $39.95 for our entire package.  Get it here using Special Code HWN16 (or HWN16P for Premium Service – $79.95).   Do it today, before you forget and lose out.  This offer expires at midnight tonight, October 31, 2016.

 

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