These Conservative Underlying Shares Might Print Higher by September
Tokyo-based optics specialist Canon (CAJ) has fallen to levels rarely seen since 2009. The company is healthy and profitable. It pays a generous dividend. CAJ’s absolute P/E is low by historical standards while their relative multiple hovers near multi-year lows as well.
Canon has solid technical support at the $30 mark dating back almost five years.
Market Shadows sold two contracts of the September 2014, $35 puts this afternoon for premium of $5.30 per share. We collected $1,060 while committing to buy 200 shares of Canon, if exercised, at a net price of $29.70 ($35 strike – $5.30 premium).
This appears to, be a low-risk proposition as the absolute annual lows touched briefly in 2010, 1011, 2012 and 2013 were $36.80, $41.70, $29.80 and $29.80 respectively.
Canon shares peaked north of $40 during each of the past nine years.
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