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November 10, 2009 7:54 EST Related Symbols: JNJ
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Mad About Options
An options-related take on Jim Cramer's latest recommendations and analysis on the latest securities and ETFs getting attention on the Street.
How did options strategies play out in Cramer’s Johnson & Johnson pick?
Mad About Options takes a look at the stocks getting coverage from Jim Cramer, Fast Money casts and other heavy hitters in the financial press and reviews strategies option traders might have used if they agree or disagree with these assessments of the underlying stocks.
The Pick –Johnson & Johnson (JNJ)
In an Aug. 11 broadcast of Mad Money , host Jim Cramer said he is bullish on JNJ, but he likes Bristol-Myers Squibb (BMY) “even more.” JNJ shares are now trading at $60.30, up from $60.22 at the time of that report. How did the bullish and bearish option traders fare?
Bullish Option Traders on JNJ:
On Aug. 13, we pointed out that bullish investors bought two October 50 calls for $10.90 and sold two October 60 calls for $2.10, to pay $17.60 for this spread. The bull call spread expired with the stock trading at $60.46 per share, making this a winner of $2.40 with the stock up eight cents. OptionsHouse
Bearish Option Traders on JNJ:
Bearish investors could have employed a collar or bear synthetic strategy by buying January 2011 50 puts for $3 and selling January 2011 65 calls for $3.40. Investors collected 40 cents on this collar trade, and the spread is now marked at 30 cents. This trade is also a winner, but by 10 cents with the stock up eight cents.
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