December 14, 2011 9:51 AM | 1 min read |
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Goldman Sachs is out with a research note this morning, where it suggests that traders buy straddles on Honeywell International (NYSE: HON) ahead of December 15th guidance. Every year, HON hosts a conference call in mid-December for management to communicate guidance for the next year. Since 2003, HON shares have moved an average of +/-5% on the day of the event, twice the median move on earnings over the past 8 quarters. The analysts recommend buying HON December straddles as one month implied volatility of 32% is one point below three month implied and 9 points below three month realized.The analysts suggest buying the Dec2011 $55 straddle for $3.32Honeywell International Inc. is a diversified technology and manufacturing company, serving customers worldwide with aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals, and energy efficient products and solutions for homes, business and transportation.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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