Trade - 7/20/09 - LLY

STO (2) Naked Put - LLY (ELI LILLY & CO) Aug 09 @ $32.50 for $0.80 each. Net Premium $159. I am continuing on the theme that any O’bama plan will have little affect on the drug companies. If that is true these drug companies are way undervalued compared to historic prices.

Risk Management:

Ticker: LLY
Expiratoin: 21-Aug-09
Invest Date 20-Jul-09

Current Stock Price $33.50
Strike Price $32.50
Premium $0.80
Annual Dividend $1.96

Days to Expiration 32
Return (Assumes CSP) 2.46%
Annualized Return 28.08%
Downside Protection 5.37%
Effective Dividend if Put 6.18%