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By: Giorgio Ferrero, Oxen Group Contributor

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Daily Data: Tesoro Corporation (TSO)

I was looking at Tesoro the other day since we have a position in our Dollar & Sense portfolio for July expiration. However, since the stock has increased in value so quickly recently I was curious to see what its max return has been since 2002. Below are the June to August option expiration returns for past the past 10 years.

Above, you can see that TSO has seen a strong bearish bias in the June to August option expiration period. The negative returns during this period have been large and numerous. Assuming the best return of 6% I estimated a max high for the stock of $24.11 on August 17th. Note, although TSO is to see positive EPS growth this year (1,947%), it expected to see negative growth next year (-7.44%) and little growth for the next 5 years (5.77%). I'm happy we're holding a bull put spread on TSO only until Jul'21. Given the data above I'm bearish into the longer term. Based on the information above I suggest the following trade: Note the following trade is really a hit or miss trade. Earnings are on August 1st and anything could happen. If earnings are bad I will definitely be looking at bear calls spreads close to the 24 strike level on August 2nd.

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Suggested Trade: TSO - Sell Aug'17 28/29 call spread (Bear Call Spread)

(Sell 28 call/ Buy 29 Call)

Size - 4% of Option Spread Portfolio Size = (4 spreads)

Entry: Sell Limit: 0.22

Stop Loss: 0.72

Exit Price: 0.00

Max Return: 28.20%

(Max Return Calculated on Return on Risk from my entry, not Return on Margin)

Daily Data: ConAgra Foods, Inc. (CAG)

ConAgra is not in great shape these days. Fundamentally, the stock is expected to see negative EPS growth this year (-41.42%), 6.57% growth for next year, and 6.63% growth for the next 5 years. There is virtually no growth in the company right now. The only appealing aspect of owning ConAgra right now is its 3.73% dividend. Technically, the stock has been trending sideways since October. Earnings are not until September 17th thus I feel the stock will not move much until then. To strengthen my argument that the stock will probably not move much until September'17 let's look at the June to August option expiration date returns since 2002.

Above you can see that ConAgra has seen mixed returns during this time frame since 2002. Though there have been some positive return years the majority are negative. Assuming the largest positive/negative returns I have estimated a max high/low for the stock to be $21.63/$27.15 for August 17th. Unfortunately, since ConAgra has a low beta of 0.67 there is no market for the 27 strike options. The only possible trade is the August 17 26/27 bear call spread which we may place next week. Because the position is so close the current stock price I want to keep the trade small (hence 4% position).

Suggested Trade: CAG - Sell Aug'17 26/27 call spread (Bear Call Spread)

(Sell 26 call/ Buy 27 Call)

Size - 4% of Option Spread Portfolio Size = (4 spreads)

Entry: Sell Limit: 0.17

Stop Loss: 0.36

Exit Price: 0.00

Max Return: 20.48%

(Max Return Calculated on Return on Risk from my entry, not Return on Margin)

Current Positions:

Apple (AAPL) - Our Apple positions are doing great. The stock price climbed 4 of the past 5 days. Netting Apple positive 3.75% this week.

Aug'17 500/495 Bull Put Spread

Price Target: Wait for spread to expire worthless

Stop loss: 1.35

AAPL - Aug'17 520/515 Bull Put Spread

Price Target: Wait for spread to expire worthless

Stop loss: 2.00

Ultrashort Gold (GLL) - Gold gave up its gains last week from the week before. As a result our Proshares UltraShort Gold ETF climbed 1.69% last week. Yet our bear call spread is in good shape and I continue to like our position.

Aug'17 21/22 Bear Call Spread

Price Target: Wait for spread to expire worthless

Stop loss: 0.30

IBM (IBM) - IBM lost -2.13% this week and the stock is back near its critical $190 level. We may exit this position early on a break of $190 but for right now, all we can do it wait and see.

Aug'17 175/170 Bull Put Spread

Price Target: Wait for spread to expire worthless

Stop loss: 1.00

eBay (EBAY) - eBay lost 3.81% this week and broke through both its 20/50 SMAs. Initial support is at $40 which I expect to hold otherwise secondary support is at $38 would probably stop out at.

Aug'17 36/35 Bull Put Spread

Price Target: Wait for spread to expire worthless

Stop loss: 0.24

Ultrashort Crude (SCO) - As with gold crude also gave up some gains this week thus our ProShares Ultra Short Crude increase 0.40% for the week. With the ETF currently at $49.62 we're looking good compared to when the ETF was at $59 just a couple days after we entered our bear call spread.

Aug'17 54/55 Bear Call Spread

Price Target: Wait for spread to expire worthless

Stop loss: X

Pitney Bowes (PBI) - PBI decline 3.34% this week which is nice but not enough for our position to be profitable. We need PBI to close at or below $14 for us to receive a full profit.

Jul'21 14/15 Bear Call Spread

Price Target: Wait for spread to expire worthless

Stop loss: X

Disclosure: I do not own any investments in TSO or CAG. I own short calendar/vertical spreads on GLL (I'm short GLL). I own an iron condor on SPY. I'm short SCO and GLL. I'm long AAPL

Charts and data come from Finviz.com and Tradingeconomics.com.

News from: www.theflyonthewall.com.

Source: Option Spread Portfolio: Trading Tesoro And ConAgra Foods Into August