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Top Trades for Tue, 01 Aug 2017 11:32 – TEVA

TEVA/Lunar – Well, we recently got more aggressive on them, buying back the short calls and adding more short puts on 6/16.  

They have 1Bn shares so $32 is about $32Bn and they made $3Bn in 2014, $1.5Bn in 2015 and $330M last year but, going forward, they should be back on track as they just made $645M in Q1 (they are like AMZN, they can make money whenever they feel like it – except TEVA actually does feel like it sometimes) and if Q2 (8/3) proves Q1 wasn't a fluke (it wasn't), they should punch right over $35 so I wouldn't worry about your position.  In fact, I'd buy back the short $40s ($1.90) and then sell something else on the pop.  If they don't pop, then you can sell the $30s ($5.30) to some other sucker and use that money to roll to the $22.50s (now $10) so you'd be in a much lower spread for about the same money.

As a new play on TEVA, I would sell 5 2019 $30 puts for $4.20 ($2,100) and buy 10 of the 2019 $32.50 ($4.20)/$40 ($1.90) bull call spreads for $2.30 ($2,300) which would put you in the $7,500 spread for net $200 and worst case is you own 500 shares of TEVA for net $32.90 while best case is up $7,300 (3,650%) in 18 months.  

Let's add that to the OOP.

 


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