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New Trade: SELL NOV14 PUTS on GLW

My account grew a bit once again and I decided to open another trade – a new put selling trade against Corning Inc (GLW). The company in a nutshell manufactures glass (if you can call it that way) which is used in iPhones, smart phones and tablets. That gives the company a great advantage as the mobile market is growing. The display technology is not the only segment this company operates. It is also involved in Telecommunications, Environmental Technologies, Specialty Materials and Life Sciences.

In 2011 Corning launched Corning Lotus Glass, an environmentally friendly, display glass developed to enable technologies, including organic light-emitting diode (OLED) displays and next generation liquid crystal displays (LCD). Corning Lotus Glass helps support the demanding manufacturing processes of both OLED and liquid crystal displays for portable devices, such as smart phones, tablets, and notebook computers. In March 2011, the Company acquired all outstanding shares from the shareholders of MobileAccess. In December 2011, it acquired Mediatech, Inc. In May 2013, the Company acquired Bargoa SA. Effective January 15, 2014, Corning Inc acquired the remaining 50.6% interest in Samsung Corning Precision Materials Co Ltd.

Thus I decided to take a long trade to give the company to grow (and thus make sure it expires worthless) and I could collect a nice premium as well.

Trade Detail

STO 1 GLW NOV14 21 put @ 1.40

The trade has a low BP (buying power) or maintenance requirements, expected ROI 7.14%, expected ROM 33.40%, and a safety factor at 0.57%. I entered the trade for tomorrow morning. If all is good it should execute.

 

Max Profit $140 When selling puts, the hope is that they will expire worthless, so the max profit is equal to your execution price. Max profit occurs if GLW is above $21.00 on expiration day, which is November 21 for this option.
Max Loss $1960 In theory, GLW could keep going down all the way to zero, and since you are giving someone else the right to sell it at 21, your max loss is very high. However, remember that this trade has a time limit on it. On expiration day, November 21 for this option, if GLW is below 21 you will either need to buy back (cover) the put or you will be assigned -100 shares of GLW as a long position, with an entry of 21.

 
 

 
 
 
 

 
 

I will report tomorrow if the trade executes or I had to make an adjustment to it. You can use My Trade page to copy the trade to your ThinkorSwimm platform.

Happy Trading!
 





2 responses to “New Trade: SELL NOV14 PUTS on GLW”

  1. I have purchased and cold GLW corning a few times all with a decent profit. Their gorilla glass product is great!. What has me concerned is that Apple has purchased a sapphire crystal plant and is rumored to possible make their entire displays as saph crystal which is concerning for GLW as they would drop GLW. However is would be a very costly process and I dont think that would happen for quite a while as the high per unit cost. Regardless GLW is at the forefront of mobile displays as long as they keep their technological lead.

    Great blog as always man !

    • Martin says:

      AG, thanks for pointing it out as I missed the news on Apple deal. Well, one reason more to watch GLW more closely. Thanks for stopping by!

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