NaughtyPines

SOLD TEVA SEPT 16TH 47.5 PUT

NYSE:TEVA   TEVA PHARMACEUTICAL INDS LTD
Selling the 47.5 put naked here below support as a potential precursor to a covered call, which I got filled for a .73 ($73)/contract credit.

Basically, my thought process here is that I might want to covered call TEVA             , but don't want to buy shares here at 53 (lower is better). I'll naturally watch price and roll the short put down and out for a credit should it appear that it's going to totally implode such that I could get the shares even cheaper. Otherwise, I'll just keep the credit collected for the short put here and/or cover in profit it if something better comes along.
Comment: TEVA's got some patent approval stuff in the hopper that will probably affect stock price one way or the other. Naturally, if the announcement is favorable (it could come at any time within the next several days), the stock will rise, and this position will be fine. However, if it isn't, the stock could decline somewhat precipitously. To protect the short put from downside, I'll probably look to buy some cheap (.05-.10) long put action below my short at Monday open. Better safe than sorry. Moreoever, if I can profit from a short-term down move here with some long put action, it's all good ... . If not, I'm only out a few bucks for the "insurance" longs.
Comment: The Sept 16th 42.5 long put is bid .04/ask .10 (.07) at the mid, so that's probably the puppy I'll be taking home from the pet store ... . Will see at NY open.
Comment: Filled the Sept 42 long for .06. Hope that "cheap insurance" isn't required ... .
Trade closed manually: I probably could have been more patient with this, but decided to cover it today for a .31 db, a net profit of $28/contract. All this Hill-Dawg talk about Epi-Pens ... .
I like this position
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