This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Selling Puts in Johnson Controls

TheStreet Premium Services

A complimentary preview
of Options-Profits Previews

During a crisis like we are going through there are two ways to look at the market. One can stick their head in the dirt like an ostrich, or one can practice an approach I have dubbed "Linking".

Linking: Buying fundamentals in face of illogical markets; named after Stephanie Link

Basically, take the Action Alerts Plus approach and buy stocks on fundamentals and see the big market sell offs as good chances to buy good companies at a discount. One name that AAP really likes that I think looks interesting is Johnson Controls (JCI). It did not take a big dive with the SPX as we sold off earlier in the week. The low tick was barely below $40 in this name. Good stocks sell off less on sell offs and rally more on recoveries. JCI appears to be doing just that.

Even better the stock's implied volatility has been going up and up and earnings are still about 20 days away. I think the stock is going to be either moving higher, or at a minimum sitting above $40 for through the end of the month. With the vol jacked up I think a put sale in JCI or a put spread in JCI makes lots of sense. Let's Link JCI and sell a Nov 41 put at $1.25. With any luck JCI could turn into a good wheel candidate (selling puts to get long then selling covered calls).

Trade: Sell to open JCI Nov 41 puts at $1.25.

OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits

Mark can be followed on Twitter at twitter.com/OptionPit

EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

At the time of publication, Mark Sebastian held no positions in the stocks or issues mentioned, while the Action Alerts Plus portfolio is long JCI.


Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
Top Rated Stocks Top Rated Funds Top Rated ETFs