TheOptionPlayer.com sets up a Johnson & Johnson (JNJ) short-term (18-day) option strategy (Based on Monday’s closing quoted bid/ask mean)

The difference between funds paid out and received is a $.81 per share debit maximum risk for this trade. The maximum profit is approximately $2.19 per share if the Johnson & Johnson shares move higher prior to the option contract expiration date. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.

Why we recommend it:
As evidenced in the daily chart below, Johnson & Johnson (NYSE: JNJ) stock got punished a few weeks ago after investors soured on the company’s quarterly earnings results and concerns about increased competition. However several market analysts confirm the selloff was overblown. The company actually exceeded analyst expectations and reported strong future guidance. Observe in the chart how Johnson & Johnson shares appear to starting a recovery bounce from being oversold. One reason for the move higher is the probability that Hillary Clinton will win the presidential election and JNJ stock is viewed as prime beneficiary if in fact she does prevail. Even if Clinton is not elected the risk is minimal for this type of trade. We are betting Johnson & Johnson stock price will follow through on the current bullish reversal move after the election results.

52-Week High: $125.40
52-Week Low: $95.75