OLED – Seems to be a done deal with AAPL and other screen companies selling off. $115 is nothing as the prior AAPL speculation took them to $200.
The July $115 ($7.60)/$125 ($4.40) bull call spread at $3.20 is a good way to play this as it can make $6.80 very easily for a 200%+ gain in 52 days.
GE/StJ – I agree, a lifetime of call selling suits me just fine.
Let's say we start with:
- Selling 20 GE 2020 $18 puts for $4.20 ($8,200)
- Buying 40 GE 2020 $13 calls for $3.20 ($12,800)
- Selling 40 GE 2020 $18 calls for $2.20 ($8,800)
That's a $4,200 credit so net $15.90 is your worst entry but, of course, the current $18 puts are $3.50 and the 2020 $15 puts are $2.10 so we could roll to 30 of those and then 40 of the 2022 $13 puts and 60 of the 2024 $10 puts so we're committing to buying 6,000 shares of GE at $10 ($60,000) at which point we'd sell 60 2026 $10 calls for $1.50(ish) and pick up $9,000 (15%) plus the dividends – even if we don't want to sell more puts.
On a more optimist note, we could get back $20,000 at $18 in just two years plus the $4,200 credit is net $24,200 profit potential against about $3,000 in ordinary margin.
When the worst case seems like owning a nice, annual dividend-payer and the best case is 10x back on your credit – you have to work very hard to find a reason NOT to take a trade!
Net worth/StJ – That's why I tend to stay away from companies that depend on the disposable income of the Bottom 80%.
