5 days ago
Friday, July 31, 2009
Closeout - 7/31/09 - MEE
Closed out my position in MEE today after 4 days. Annualized return of 228%.
New Trade - 7/31/09 - IPI
STO (5) Naked Put - IPI (INTREPID POTASH INC) Aug 09 @ $25 Strike for $1.45 each. Net Premium $721. I am taking a larger than normal position on this one after doing some extensive research. Just some important notes that influenced my decision:
* IPI has NO DEBT
* Potash (their primary market) has slumped this year after an extreme price spike last year.
* Potash is a fertilizer and because of its price spike last year many farmers (several I have talked to locally here also) have decided to skip applying the potash component of their fertilizer. From several sources I have read this is creating a low nutrient level in much agriculture land across the country. This deficiency is ok for about 1 year but each time a crop is planted it removes more of the nutrients to the soil. In spring 2010 farmers will have to either not grow crops or replinish the potash in their soil. (sidenote: I know this is true because I maintain about 10 acres of wildlife foodplots. I can skip fertilizing for 1 year and be "ok" but I can't skip 2 years or I might as well not plant.)
* China currently only comsumes 13% of the world potash. As they are attempting to increase their own production of agriculture and become less dependent on the rest of the world I believe their appetite for fertilizer will increase
* Earnings are due out August 7th and are projected to be 30 cents per share. I think they will beat this estimate.
Risk Management:
Ticker: IPI
Expiratoin: 21-Aug-09
Invest Date 31-Jul-09
Current Stock Price $25.40
Strike Price $25.00
Premium $1.45
Annual Dividend $-
Days to Expiration 21
Return (Assumes CSP) 5.80%
Annualized Return 100.81%
Downside Protection 7.28%
Effective Dividend if Put 0.00%
* IPI has NO DEBT
* Potash (their primary market) has slumped this year after an extreme price spike last year.
* Potash is a fertilizer and because of its price spike last year many farmers (several I have talked to locally here also) have decided to skip applying the potash component of their fertilizer. From several sources I have read this is creating a low nutrient level in much agriculture land across the country. This deficiency is ok for about 1 year but each time a crop is planted it removes more of the nutrients to the soil. In spring 2010 farmers will have to either not grow crops or replinish the potash in their soil. (sidenote: I know this is true because I maintain about 10 acres of wildlife foodplots. I can skip fertilizing for 1 year and be "ok" but I can't skip 2 years or I might as well not plant.)
* China currently only comsumes 13% of the world potash. As they are attempting to increase their own production of agriculture and become less dependent on the rest of the world I believe their appetite for fertilizer will increase
* Earnings are due out August 7th and are projected to be 30 cents per share. I think they will beat this estimate.
Risk Management:
Ticker: IPI
Expiratoin: 21-Aug-09
Invest Date 31-Jul-09
Current Stock Price $25.40
Strike Price $25.00
Premium $1.45
Annual Dividend $-
Days to Expiration 21
Return (Assumes CSP) 5.80%
Annualized Return 100.81%
Downside Protection 7.28%
Effective Dividend if Put 0.00%
Trade - 7/31/09 - VALE
STO (2) Naked Put - VALE (VALE SA) Aug 09 @ $19 Strike for $0.55 each. Net Premium $109. Purely a speculation play on the global recovery. Especially that of China and emerging nations.
Risk Management:
Ticker: VALE
Expiratoin: 21-Aug-09
Invest Date 31-Jul-09
Current Stock Price $19.67
Strike Price $19.00
Premium $0.55
Annual Dividend $0.48
Days to Expiration 21
Return (Assumes CSP) 2.89%
Annualized Return 50.31%
Downside Protection 6.20%
Effective Dividend if Put 2.60%
Risk Management:
Ticker: VALE
Expiratoin: 21-Aug-09
Invest Date 31-Jul-09
Current Stock Price $19.67
Strike Price $19.00
Premium $0.55
Annual Dividend $0.48
Days to Expiration 21
Return (Assumes CSP) 2.89%
Annualized Return 50.31%
Downside Protection 6.20%
Effective Dividend if Put 2.60%
Wednesday, July 29, 2009
Trade - 7/29/09 - UNG
STO (2) Naked Put - UNG (US NATURAL GAS FUND LP) Aug 09 @ $12 for $0.55 each. Net Premium $109.
I am going to add to my position on UNG today on a down day. This gives me downside protection to $11.45 ($12 - $0.55) for a 3 week period. This is a 4% return for a short period. I still feel good at this level regardless of supply data. If we happen to get a pull back below $12 on UNG I will look to add some $11 NPs.
I am going to add to my position on UNG today on a down day. This gives me downside protection to $11.45 ($12 - $0.55) for a 3 week period. This is a 4% return for a short period. I still feel good at this level regardless of supply data. If we happen to get a pull back below $12 on UNG I will look to add some $11 NPs.
Tuesday, July 28, 2009
Trade - 7/28/09 - IPI
STO (1) Naked Put - IPI (INTREPID POTASH INC) Aug 09 @ $25 for $1.20 each. Net Premium $119.
Just a limp into this one. I will add to it if we get a pull back.
Risk Management:
Ticker: IPI
Expiratoin: 21-Aug-09
Invest Date 28-Jul-09
Current Stock Price $26.65
Strike Price $25.00
Premium $1.20
Annual Dividend $-
Days to Expiration 24
Return (Assumes CSP) 4.80%
Annualized Return 73.00%
Downside Protection 10.69%
Effective Dividend if Put 0.00%
Just a limp into this one. I will add to it if we get a pull back.
Risk Management:
Ticker: IPI
Expiratoin: 21-Aug-09
Invest Date 28-Jul-09
Current Stock Price $26.65
Strike Price $25.00
Premium $1.20
Annual Dividend $-
Days to Expiration 24
Return (Assumes CSP) 4.80%
Annualized Return 73.00%
Downside Protection 10.69%
Effective Dividend if Put 0.00%
Monday, July 27, 2009
Trade - 7/27/09 - MEE
STO (3) Naked Put - MEE (Massey Energy) Aug 09 @ $20 for $0.65 each. Net Premium $193. I have been reluctant up to now to invest in coal but this one is a strong comapny and this trade offers alot of downside protection. China is opening 1 new coal burning plant a week and there is no end in sight for them. China gets the bulk of their coal from the good 'ol USA.
Risk Management:
Ticker: MEE
Expiratoin: 21-Aug-09
Invest Date 27-Jul-09
Current Stock Price $23.65
Strike Price $20.00
Premium $0.65
Annual Dividend $0.24
Days to Expiration 25
Return (Assumes CSP) 3.25%
Annualized Return 47.45%
Downside Protection 18.18%
Effective Dividend if Put 1.24%
Risk Management:
Ticker: MEE
Expiratoin: 21-Aug-09
Invest Date 27-Jul-09
Current Stock Price $23.65
Strike Price $20.00
Premium $0.65
Annual Dividend $0.24
Days to Expiration 25
Return (Assumes CSP) 3.25%
Annualized Return 47.45%
Downside Protection 18.18%
Effective Dividend if Put 1.24%
Thursday, July 23, 2009
Closeouts - 7/23/09 - NSC, BMY, T, CTL -
I closed out my naked puts in NSC, BMY, T and CTL today. All were bought back for pennies on the dollar except CTL that was bought back for 50 cents on the dollar. The DOW crossed 9,000 today and I just don't see why.
I am booking these profits to have capital available for a pullback. I am not seeing the economic recovery that everybody is talkiing about. I see banks not lending, I see people with credit card balances that used to be at 6% interest going to 30%, I see people's hours being cut at work (the lucky ones who aren't losing their jobs), I see people who have available credit on their cards having them cancelled by the banks. I see new foreclosures being filed daily at the course. I see banks that are holding houses and not putting them on the market right now (phantom inventory). I see companies issues across the board pay cuts. I see long lines when I drive by the unemployment office. I see the renters eviction court cases at the court house that are 25 pages long each day that used to be 5 pages long. I see stores cutting inventory they carry (go into Lowes, Sam's or Costco and note that there is less product on the shelves). I see companies only beeting estimates because estimates are so low. I see companies with negative growth (even the ones that show increases in earnings are NOT doing it from increased revenue but instead from cost cutting (mainly jobs).
In summary as a country I don't think we can recover from 25 years of sins (over leverage) in just 6 months.....
I am booking these profits to have capital available for a pullback. I am not seeing the economic recovery that everybody is talkiing about. I see banks not lending, I see people with credit card balances that used to be at 6% interest going to 30%, I see people's hours being cut at work (the lucky ones who aren't losing their jobs), I see people who have available credit on their cards having them cancelled by the banks. I see new foreclosures being filed daily at the course. I see banks that are holding houses and not putting them on the market right now (phantom inventory). I see companies issues across the board pay cuts. I see long lines when I drive by the unemployment office. I see the renters eviction court cases at the court house that are 25 pages long each day that used to be 5 pages long. I see stores cutting inventory they carry (go into Lowes, Sam's or Costco and note that there is less product on the shelves). I see companies only beeting estimates because estimates are so low. I see companies with negative growth (even the ones that show increases in earnings are NOT doing it from increased revenue but instead from cost cutting (mainly jobs).
In summary as a country I don't think we can recover from 25 years of sins (over leverage) in just 6 months.....
Trade - 7/23/09 - NYX
STO (2) Naked Put - NYX (NYSE EURONEXT INC.) Aug 09 @ $25 for $1.03 each. Net Premium $205.
Risk Management:
Ticker: NYX
Expiratoin: 21-Aug-09
Invest Date 23-Jul-09
Current Stock Price $26.00
Strike Price $25.00
Premium $1.03
Annual Dividend $1.20
Days to Expiration 29
Return (Assumes CSP) 4.12%
Annualized Return 51.86%
Downside Protection 7.81%
Effective Dividend if Put 5.01%
Risk Management:
Ticker: NYX
Expiratoin: 21-Aug-09
Invest Date 23-Jul-09
Current Stock Price $26.00
Strike Price $25.00
Premium $1.03
Annual Dividend $1.20
Days to Expiration 29
Return (Assumes CSP) 4.12%
Annualized Return 51.86%
Downside Protection 7.81%
Effective Dividend if Put 5.01%
Monday, July 20, 2009
Trade - 7/20/09 - PFE
BTC (2) PFE @ 0.16. Closed out my Pfizer trade from 11 days ago. More for a redeployment of capital than anything. I opened a new trade with LLY today with that capital. Net profit was $0.45 per share (.61 - .16). This was a 3.2% return for 11 days or 106% annualized. If Pfizer drops back down I will reenter this position.
Trade - 7/20/09 - LLY
STO (2) Naked Put - LLY (ELI LILLY & CO) Aug 09 @ $32.50 for $0.80 each. Net Premium $159. I am continuing on the theme that any O’bama plan will have little affect on the drug companies. If that is true these drug companies are way undervalued compared to historic prices.
Risk Management:
Ticker: LLY
Expiratoin: 21-Aug-09
Invest Date 20-Jul-09
Current Stock Price $33.50
Strike Price $32.50
Premium $0.80
Annual Dividend $1.96
Days to Expiration 32
Return (Assumes CSP) 2.46%
Annualized Return 28.08%
Downside Protection 5.37%
Effective Dividend if Put 6.18%
Risk Management:
Ticker: LLY
Expiratoin: 21-Aug-09
Invest Date 20-Jul-09
Current Stock Price $33.50
Strike Price $32.50
Premium $0.80
Annual Dividend $1.96
Days to Expiration 32
Return (Assumes CSP) 2.46%
Annualized Return 28.08%
Downside Protection 5.37%
Effective Dividend if Put 6.18%
Trade - 7/20/09 - CHU
Sold 2 Covered Calls on an existing position in CHU (CHINA UNICOM HONG KONG LTD) this morning. Stock was trading at about $15 so I sold 2 covered calls at 90 cents each for a 6% premium (72% annualized plus dividends). Net premium collected $179.
Wednesday, July 15, 2009
Trade - 7/15/09 - UNG
I bought back my (3) July covered calls in UNG today for $2 each. I did this to clear the way for writing my August calls. I am looking for a $14 August call but may wait until after the 10:30 release of inventory numbers.
Trade - 7/15/09 - VZ
STO (3) Covered Calls on VZ (Verizon) Aug 09 Strike @ $30 for $0.59. Net Premium $175.
I bought back my July Calls on Verizon for 2 cents each just so I could go ahead and move into the August calls. Still a great company with a solid dividend. I will look to enter some naked puts also on this one if it trades below $29.
I bought back my July Calls on Verizon for 2 cents each just so I could go ahead and move into the August calls. Still a great company with a solid dividend. I will look to enter some naked puts also on this one if it trades below $29.
Monday, July 13, 2009
Trade - 7/13/09 - CLX
STO (1) Covered Call on CLX Aug 09 Strike @ $60 for $0.55. Net Premium $54.
This is one where I bought CLX a couple of weeks ago for $55 and planned to wait until it moved up a couple of ticks and then write a deep out of the money Call. With the stock now trading at $57.30 I am taking a 1% premium (hopefully each month on top of the dividend) on a $60 call. If I get called it will add almost another 10% to the return (price appreciation). This is a slightly different variation on my other investments looking for safety with a high quality stock with a supersafe dividend.
This is one where I bought CLX a couple of weeks ago for $55 and planned to wait until it moved up a couple of ticks and then write a deep out of the money Call. With the stock now trading at $57.30 I am taking a 1% premium (hopefully each month on top of the dividend) on a $60 call. If I get called it will add almost another 10% to the return (price appreciation). This is a slightly different variation on my other investments looking for safety with a high quality stock with a supersafe dividend.
Trade - 7/13/09 - NYX Closeout
I went ahead and closed out my (3) Naked Puts for NYX that were for a strike of $25 this month (July 09). It cost me 25 cents per put to buy them back. It was still a very nice trade and will look to re-enter the position for an August strike within the next week. I bought them back because I already have 300 shares that I am writing Covered Calls against and due to the short term market volatility of earnings annoucements this week I wanted to free up cash (cash secured for this put) to be available to invest in case we have a significant pull back. Absent a significant pull back I will move right back into NYX for August strikes.
Thursday, July 9, 2009
Trade - 7/9/09 - PFE
STO (2) Naked Put - PFE (Pfizer) Aug 09 @ $14 for $0.61 each. Net Premium $121.
I am starting to think that any O’bama plan will have little affect on the drug companies. If that is true then several drug companies are substantially under-valued. Also, I am trying to avoid discretionary spending type stocks right now.
Risk Management:
Ticker: PFE
Expiratoin: 21-Aug-09
Invest Date 09-Jul-09
Current Stock Price $14.30
Strike Price $14.00
Premium $0.61
Annual Dividend $0.64
Days to Expiration 43
Return (Assumes CSP) 4.36%
Annualized Return 36.99%
Downside Protection 6.36%
Effective Dividend if Put 4.78%
I am starting to think that any O’bama plan will have little affect on the drug companies. If that is true then several drug companies are substantially under-valued. Also, I am trying to avoid discretionary spending type stocks right now.
Risk Management:
Ticker: PFE
Expiratoin: 21-Aug-09
Invest Date 09-Jul-09
Current Stock Price $14.30
Strike Price $14.00
Premium $0.61
Annual Dividend $0.64
Days to Expiration 43
Return (Assumes CSP) 4.36%
Annualized Return 36.99%
Downside Protection 6.36%
Effective Dividend if Put 4.78%
Wednesday, July 8, 2009
Trade - 7/8/09 - TK
STO (2) Naked Put - TK (Teekay Corp) Aug 09 @ $15 for $0.75 each. Net Premium $223.
Troy and I have been researching this one for about a month and I just felt like the pull back was a good entry point for a August Naked Put. This seems to be a solid company that is well diversified in the tanking industry through 3 subs/MLPs that it operates. I would rather have less of a debt load on the company but from their most recent investors conference they seem committed to using current cash flow to pay down debt.
Risk Management:
Ticker: TK
Expiratoin: 21-Aug-09
Invest Date 08-Jul-09
Current Stock Price $17.60
Strike Price $15.00
Premium $0.75
Annual Dividend $1.27
Days to Expiration 44
Return (Assumes CSP) 5.00%
Annualized Return 41.48%
Downside Protection 19.03%
Effective Dividend if Put 8.88%
Troy and I have been researching this one for about a month and I just felt like the pull back was a good entry point for a August Naked Put. This seems to be a solid company that is well diversified in the tanking industry through 3 subs/MLPs that it operates. I would rather have less of a debt load on the company but from their most recent investors conference they seem committed to using current cash flow to pay down debt.
Risk Management:
Ticker: TK
Expiratoin: 21-Aug-09
Invest Date 08-Jul-09
Current Stock Price $17.60
Strike Price $15.00
Premium $0.75
Annual Dividend $1.27
Days to Expiration 44
Return (Assumes CSP) 5.00%
Annualized Return 41.48%
Downside Protection 19.03%
Effective Dividend if Put 8.88%
Trade - 7/8/09 - NAT
STO (2) Naked Put - NAT (NORDIC AMERICAN TANKER SHIPPING) Aug 09 @ $30 for $2.25 each. Net Premium $449.
Risk Management:
Ticker: NAT
Expiratoin: 21-Aug-09
Invest Date 06-Jul-09
Current Stock Price $30.15
Strike Price $30.00
Premium $2.25
Annual Dividend $3.52
Days to Expiration 46
Return (Assumes CSP) 7.50%
Annualized Return 59.51%
Downside Protection 7.96%
Effective Dividend if Put 12.68%
Risk Management:
Ticker: NAT
Expiratoin: 21-Aug-09
Invest Date 06-Jul-09
Current Stock Price $30.15
Strike Price $30.00
Premium $2.25
Annual Dividend $3.52
Days to Expiration 46
Return (Assumes CSP) 7.50%
Annualized Return 59.51%
Downside Protection 7.96%
Effective Dividend if Put 12.68%
Tuesday, July 7, 2009
Trade - 7/6/09 - CTL
STO (1) Naked Put - CTL (CENTURYTEL INC) Aug 09 @ $30 for $1.50 each. Net Premium $149. Also purchased 200 shares straight out to write Covered Calls on later.
Ticker: CTL
Expiratoin: 21-Aug-09
Invest Date 06-Jul-09
Current Stock Price $29.75
Strike Price $30.00
Premium $1.50
Annual Dividend $2.80
Days to Expiration 46
Return (Assumes CSP) 5.00%
Annualized Return 39.67%
Downside Protection 4.20%
Effective Dividend if Put 9.82%
Ticker: CTL
Expiratoin: 21-Aug-09
Invest Date 06-Jul-09
Current Stock Price $29.75
Strike Price $30.00
Premium $1.50
Annual Dividend $2.80
Days to Expiration 46
Return (Assumes CSP) 5.00%
Annualized Return 39.67%
Downside Protection 4.20%
Effective Dividend if Put 9.82%
Monday, July 6, 2009
Trades - 7/6/09 - UNG
STO (4) Naked Put - UNG (US NATURAL GAS FUND LP) July 09 @ $12 for $0.35 each. Net Premium $137.
Risk Management:
Ticker: UNG
Expiratoin: 17-Jul-09
Invest Date 06-Jul-09
Current Stock Price $12.55
Strike Price $12.00
Premium $0.35
Annual Dividend $-
Days to Expiration 11
Return (Assumes CSP) 2.92%
Annualized Return 96.78%
Downside Protection 7.17%
Effective Dividend if Put 0.00%
Risk Management:
Ticker: UNG
Expiratoin: 17-Jul-09
Invest Date 06-Jul-09
Current Stock Price $12.55
Strike Price $12.00
Premium $0.35
Annual Dividend $-
Days to Expiration 11
Return (Assumes CSP) 2.92%
Annualized Return 96.78%
Downside Protection 7.17%
Effective Dividend if Put 0.00%
Trade - 7/6/09 - NSC
STO (2) Naked Put - NSC (Norfolk Southern) July 09 @ $36 for $0.85 each. Net Premium $169.
Risk Management:
Ticker: NSC
Expiratoin: 17-Jul-09
Invest Date 06-Jul-09
Current Stock Price $36.22
Strike Price $36.00
Premium $1.10
Annual Dividend $1.36
Days to Expiration 11
Return (Assumes CSP) 3.06%
Annualized Return 101.39%
Downside Protection 3.64%
Effective Dividend if Put 3.90%
Risk Management:
Ticker: NSC
Expiratoin: 17-Jul-09
Invest Date 06-Jul-09
Current Stock Price $36.22
Strike Price $36.00
Premium $1.10
Annual Dividend $1.36
Days to Expiration 11
Return (Assumes CSP) 3.06%
Annualized Return 101.39%
Downside Protection 3.64%
Effective Dividend if Put 3.90%
Trade - 7/6/09 - ADP
STO (1) Naked Put - ADP July 09 @ $34 for $0.55 each. Net Premium $54.
Risk Management:
Ticker: ADP
Expiratoin: 17-Jul-09
Invest Date 06-Jul-09
Current Stock Price $34.07
Strike Price $34.00
Premium $0.55
Annual Dividend $1.32
Days to Expiration 11
Return (Assumes CSP) 1.62%
Annualized Return 53.68%
Downside Protection 1.82%
Effective Dividend if Put 3.95%
Risk Management:
Ticker: ADP
Expiratoin: 17-Jul-09
Invest Date 06-Jul-09
Current Stock Price $34.07
Strike Price $34.00
Premium $0.55
Annual Dividend $1.32
Days to Expiration 11
Return (Assumes CSP) 1.62%
Annualized Return 53.68%
Downside Protection 1.82%
Effective Dividend if Put 3.95%
Trade - 7/6/09 - BP
STO (1) Naked Put - BP (Brittish Protroleum) July 09 @ $45 for $0.75 each. Net Premium $74.
Risk Management:
Ticker: BP
Expiratoin: 17-Jul-09
Invest Date 06-Jul-09
Current Stock Price $45.40
Strike Price $45.00
Premium $0.75
Annual Dividend $3.36
Days to Expiration 11
Return (Assumes CSP) 1.67%
Annualized Return 55.30%
Downside Protection 2.53%
Effective Dividend if Put 7.59%
Risk Management:
Ticker: BP
Expiratoin: 17-Jul-09
Invest Date 06-Jul-09
Current Stock Price $45.40
Strike Price $45.00
Premium $0.75
Annual Dividend $3.36
Days to Expiration 11
Return (Assumes CSP) 1.67%
Annualized Return 55.30%
Downside Protection 2.53%
Effective Dividend if Put 7.59%
Trade - 7/6/09 - BMY
STO (3) Naked Put - BMY (Bristol-Myers Squibb) August 09 @ $19 for $0.61 each. Net Premium $181.
Ticker: BMY
Expiratoin: 21-Aug-09
Invest Date 06-Jul-09
Current Stock Price $19.50
Strike Price $19.00
Premium $0.61
Annual Dividend $1.24
Days to Expiration 46
Return (Assumes CSP) 3.21%
Annualized Return 25.47%
Downside Protection 5.69%
Effective Dividend if Put 6.74%
Ticker: BMY
Expiratoin: 21-Aug-09
Invest Date 06-Jul-09
Current Stock Price $19.50
Strike Price $19.00
Premium $0.61
Annual Dividend $1.24
Days to Expiration 46
Return (Assumes CSP) 3.21%
Annualized Return 25.47%
Downside Protection 5.69%
Effective Dividend if Put 6.74%
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