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Put Options on MJN on 7/16/2015

Bearish Flag on MJNMead Johnson Nutrition Company (MJN) manufactures, distributes, and sells infant formulas, children’s nutrition, and other nutritional products.

It offers routine infant formula products as a breast milk substitute for healthy infants for the use as the infant’s source of nutrition, as well as a supplement to breastfeeding under the Enfamil Premium, Enfapro Premium, Enfamil A+, and Enfalac A+ names; and solutions products to address common feeding tolerance problems, including spit-up, fussiness, gas, and lactose intolerance under the Enfamil Gentlease and Enfamil A.R names.

The company also provides specialty formula products, including formulas for addressing various conditions or special medical needs, such as cow’s milk protein and multiple other food allergies, premature and low birth weight infants, and premature babies at home, as well as produces medical foods for nutritional management of individuals under the Nutramigen, Puramino, Enfamil Premature, and EnfaCare. In addition, it offers children’s nutrition products comprising products for meeting children’s nutritional needs at toddlers and older children stage, as well as offer milk modifiers under the Enfagrow, ChocoMilk, and Cal-C-Tose names; a range of other products, including pre-natal and post-natal nutritional supplements for expectant and nursing mothers under the Expecta and EnfaMama names; and pediatric vitamin under the Enfamil Poly-Vi-Sol name, as well as multivitamins and iron supplements.

Shares had formed a bearish "flag" and dropped out of that formation yesterday after the firm cut its forecast and guided lower going forward.

 

52-Weeks Trading Range: $83.50 - $105.45

Last Trade: $86.51

Trade

  • Buy 1 August $85.00 Put at $1.25
  • For a net debit of $1.25

Profit/Loss Analysis

  • Breakeven at $83.75
  • Maximum profit is unbounded
  • Maximum loss is ($125.00) at strike of $85.00

Closing Summary

  • Sold 1 August $85.00 Put at $2.75

Position closed on 8/19/2015 at price of $2.75 with a 120.00% gain in 34 days.

Updates

8/19/2015 10:25:53 AM

We are taking profits on MJN August $85 Put options at $2.75. Note that this contract expires in two days.

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