Monday, February 28, 2011
Scenario 1 - The stock will stay below $11 over the next three weeks and the second lot will be acquired at a net price of $10.56. A price that seems attractive based on prior post, 1% below the current price and around what looks like a potential support level on the charts.
Scenario 2 - The stock moves back near or over $11 in the next three weeks. Best case the option will expire for about a 4% gain over 3 weeks, or we will keep an look-out for opportunities to cover in the even shorter term.
Friday, February 25, 2011
In the short-term - The stock jumped over $74 (nearly 5%) on the news which seemed to be a break out on the chart. Also, hopefully this news will help trigger some positive analyst moves over the coming weeks. Hence, seem like it is time to add the second lot of the stock. When the stock it filled some of the gap back to near its support level I added the second lot to the position at a price (including commissions) of $72.71.
That makes the portfolio long two lots at an average price just under $71.
Friday, February 18, 2011
Took the opportunity on this pop to sell one lots worth of May $23 calls for $.49 net of commissions.
Scenario 1 - stock runs over $23 in the next quarter and one lot of stock will be called away and result in a lighten up of the portfolios position in Intel. Over the next three months this lot will return $.49 in options, $.18 in q2 dividend, and about $.80 in capital appreciation.
A total return of $1.47 or 6.6% in a quarter.
Scenario 2 - the stock will stay flat and the 2% option premium will be pocketed.
Scenario 3 - Intel stock (and perhaps the overall market) will hit a correction period this spring and this option will be able to be covered for a small hedge on the position.
Monday, February 14, 2011
(or should that be Bungy jumped...lol)
Seems to be stalling at its technical resistance around $72.50. Covered the Feb $70 put which was sold on Thursday for $.20. The small remaining yield did not seem worth the risk of holding for a few more days. This option trade yielded 2.2% of risk capital in 2 days!
Still bullish on Bunge and will be looking for ways to add a second lot to this trade on any pullback.
Friday, February 11, 2011
Read more about the winds of change at Xerox that could blow some profits into your portfolio at
Thursday, February 10, 2011
Given the earnings seemed to contain no major negative surprises, it is time to add the second lot of the trade. Prior to adding a lot, I cleaned up the prior options "insurance" by selling off the protective put for a whopping $.10 net of commission. That means the "insurance" for buying before earnings cost a net $.90. In hind sight, not a good policy to write, but better safe than sorry. To try to establish the second trading lot, I sold one lots worth of Feb $70 puts for $1.85. Either one of two things will happen next week
a). the stock will stay under $70 and the portfolio will be long a second lot of stock at a net price of $68.15 . That is over a 1% discount from just buying the stock today, and obviously I am comfortable owing these shares
b). the stock will bounce over $70 and the put can be covered for a 2% one week gain and we will need to look for another way to get a second lot of the stock.
Wednesday, February 9, 2011
Still bullish on Boeing. However, the air force tanker decision might be getting close to announcement. This will likely move the stock in one direction or the other
Own 1 lot of shares, and looking for a cost effective way to accumulate more lots. Will consider re-establishing an options position on a short term pull back towards $70. Either a similar trade (put sale) or perhaps a strangle to try to capitalize on any move from the tanker decision.
Friday, February 4, 2011
If you believe in the positive diversification aspects of having gold in a portfolio, there are a few basic alternatives to gain gold exposure in your portfolio such as buying the Gold ETF (GLD) Gold Miners ETF (GDX). However, options on these equities provide another approach to gaining exposure which might minimize the risk in the event of a fall in the price of gold.
Learn more about a low risk option based approach to getting gold exposure in your portfolio at:
Wednesday, February 2, 2011
So maybe I was not "wrong" just "early" on the purchase.....lol
Anyway, I used the earning bounce as an opportunity to cut loses and close out the trade at $48.49. This speculative trade lost just under 1%. Fortunately this was only a one lot position .
Still... it makes me depressed enough to eat some chocolate!
Tuesday, February 1, 2011
In general there is reason to be long term bullish on Bunge. This is mostly from a strategic perspective as it provides exposure to two positive macro level trends via its core agribusiness and exposure to Emerging Markets. However, in the recent past not all of the Bunge story has been positive. This situation has created a lot of short-term uncertainty which could translate into a great long term opportunity.
Read more about establishing a hedged initial position in BG prior to its earnings at: