The Pick Gilead Sciences (NASDAQ: GILD):
On Feb. 8, Mad Money host Jim Cramer said, Gilead has a new anti-age drug coming out soon and I think Gilead is everything you want in this market. GILD shares were trading at $46 at the time of Cramers call.
BULLISH Option Trading Idea for GILD:
In-the-money call options
Buy two August 40 calls for $7.70 each
Net cost of $15.40
Maximum risk: $15.40 plus commissions
Maximum potential profit: long stock above $47.70
Breakeven: The strategy will be profitable if GILD shares are trading higher than $47.70 at August expiration.
BEARISH Option Trading Idea for GILD:
Put butterfly
Buy May 55-45 put spread for $7
Sell May 45-42 put spread for $1
Net cost of $6
Maximum risk: $6 plus commissions
Maximum potential profit: $4minus commissions
Breakeven: The strategy will be profitable if GILD shares are trading lower than $49 at May expiration.
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