HAL9000

Selling Puts on AKS: Low Risk Very High Reward

NYSE:AKS   AK STL HLDG CORP
AKS             Published good earnings 2 days ago
The stock made an intermediate high at $5.75 on this occasion
Today the company is announcing a stock issuance at $4.90
The stock price is down some 8% in adjustment to this news
Opportunity to SELL NOV 18 '16 $4.50 PUTS at c. $0.14/share
If exercised, the reward/risk will be a very compelling 2.8x
Adjusted for the risk premium, this would be more than 5x
If not exercised, pocket a 2.76% premium ($0.14/$5.07) in 3 weeks (+48% annualized)
Trade active: As the market goes down, AKS holds up well
Good sign for the put sale at $4.50
Looks like our premium is safe
Happy to own the shares at $4.50 anyway
Trade active: 9 days before the expiry of the option, it looks like we are 20% out-of-the-money.
Premium continues looks safe, for those who sold the puts.
Trade closed: target reached: The option is worthless as the stock is up 50%. Pocket the premium. Trade closed.
Ideas Scripts Chart
United States
United Kingdom
India
España
France
Italia
Polska
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Forex Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Account and Billing Sign Out