Best Stock on the Market

Put Options on HOG on 5/15/2015

Bearish Flag on HOGHarley-Davidson, Inc. (HOG) manufactures cruiser and touring motorcycles.

The company operates in two segments, Motorcycles & Related Products and Financial Services.

The Motorcycles & Related Products segment designs, manufactures, and sells wholesale street-legal Harley-Davidson motorcycles, as well as a line of motorcycle parts, accessories, general merchandise, and related services. This segment manufactures six platforms of motorcycles: Touring, Dyna, Softail, Sportster, V-Rod, and Street. It offers motorcycle parts and accessories comprising replacement parts, and mechanical and cosmetic accessories; general merchandise, such as MotorClothes apparel and riding gear; and motorcycle rentals and motorcycle rider training services, as well as licenses the Harley-Davidson name and other trademarks. This segment sells its products to retail customers through a network of independent dealers primarily in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America.

The Financial Services segment provides wholesale and retail financing, and insurance and insurance-related programs to dealers and retail customers.

Shares have formed a bearish "flag" following the company's recent quarterly results. Although, the firm posted strong results, going forward the company guided lower going forward. 

The company said it plans to cut output to between 276,000 and 281,000 bikes this year. The move was prompted by the company losing sales to competitors who are offering discounts as much as $3,000 per bike. The strengthening dollar against foreign currencies allowed European and Japanese motorcycle makers to offer discounts on their bikes in the US dollar, without hurting their home currency income. Lower share prices are expected for this stock.

52-Weeks Trading Range: $53.04 - $72.78

Last Trade: $54.61

Trade

  • Buy 1 June $55.00 Put at $1.75
  • For a net debit of $1.75

Profit/Loss Analysis

  • Breakeven at $53.25
  • Maximum profit is unbounded
  • Maximum loss is ($175.00) at strike of $55.00

Closing Summary

  • Sold 1 June $55.00 Put at $0.00

Position closed on 6/20/2015 at price of $0.00 with a -100.00% loss in 36 days.

Back to Portfolio