06/26/2013

I ' m Taking Drugs

I'm Taking Drugs

By Paul Price 

Market Shadows added a new position to our Put Selling Portfolio.

Drugstore chain Walgreens (WAG) dipped today after reporting lower than expected quarterly numbers.  The stock is down 7.3% this morning to $44.56.

We sold one contract of the January 2015 $45 strike put @ $7.15 per share this morning. 

Walgreens LEAP quote

Our break-even price is $37.85 per share.

Best Case: Our best case scenario will occur if WAG closes at $45 or higher on the option expiration date. Our maximum profit would be the $715 we collected when we sold the put option.

Worse Case: If WAG closes below $45 on the option expiration date, we will be forced to buy 100 shares of WAG for a net cost of $37.85 per share.

WAG could drop as much as $6.71 per share from the current price (i.e., dropping up to 15% from $44.56) without causing a loss.

Check out full details of the entire option portfolio here Virtual Put Selling Portfolio.

Jun 26, 2013 12:00:00 AM | Newsletter Articles, Options, Value Investing

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I'm editor at Phil's Stock World, and editor for Stock World Weekly. My background is in the biological sciences, and law. After a brief career in the legal field, I changed directions and am now working as an editor, and very much enjoying my experiences in the editing world.

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