Walgreen's Risk Reversal

I sold April 28 Walgreen's puts to buy April 34 Walgreen's calls. The reason I like this trade is that I would be willing to own Walgreen's at $28 regardless of the outcome of the dispute with Express Scripts. I remain of the belief that they will eventually settle.

2 comments:

Joseph Kulig said...

I was hoping Walgreens would settle so I would not have to transfer my prescriptions but I have finally transferred them to CVS. I was talking to my Walgreens pharmacist when getting my last refill and she said they have been very busy transferring prescriptions. I don't see myself transferring my prescriptions back Walgreens anytime soon if they eventually settle. CVS would have to piss me off for me to that.

Tsachy Mishal said...

I think most people will eventually shift prescriptions back to the most convenient location for them. There will be people like yourself who dont but in the big picture I dont think the effect will be material. Walgreen's is down from $47 so a lot is already priced in.