BlackBerry - An Investing Strategy Post Earnings To Generate Income [View article]
I like your thinking; I'm currently covered at April $16 and will figure out the next move once expiration week comes. I had half my position called away on a weekly $13 call when volatility had spiked after the sharp post Z10 sell-off. It was amazing the day of earnings to see the stock up for much of the day with the near-term options sharply down. Guess a 10% move was expected at least, and when 3-4% happened intraday the traders were disappointed.
An Excellent Risk/Reward Profile Using This High Beta Covered Call Strategy [View article]
I sold Jan 2012 covered $5s last summer amid the chaos when the stock was actually right around where it is now for something around $3.00 each. So my BE was around $3.40, with huge downside protection and upside potential around 40%. If we ever get some volatility back in this market I wouldn't hesitate to do it again; I like that you're bringing this type of idea out since most people only tend to look at selling OTM calls. When you look at the amount of hedged oil in this company over the next 16 months it is difficult to see it sustaining a drop below $5.50 for very long. Look forward to reading about any other ideas you have.
I'll be taking a look at all of their valuation metrics compared to their peers over the weekend. Point is well taken; Google is fundamentally stronger now than 5 years ago and yet they haven't gone anywhere.
I would agree for sure; these were only included to contrast hedges with actual stock positions. The title wasn't fully in my control, so I can see how that sounds a bit misleading.
Thank you for your interest. Theoretically shorting a long ETF could work better, however in practice there are some issues. The first is that there is a borrowing cost to shorting anything, and therefore any gain from the tracking error is lost. The second would be the potential margin issue if your portfolio has little free buying power due to other factors (sold puts, other shorts, already on margin, etc...). Also if the bottom dropped out of the market you will have limited your hedging ability, and actually lose hedging power as the market drops (since your short liability would decrease, the percentage gain as part of the portfolio would drop as the price drops) and require rebalancing. Taking a very small out of the money put position in UPRO can give you the most bang for your buck, but this requires excellent market timing. There are no easy answers unfortunately.
2012 Will Begin With Several Candidate Trades For The Commodity Crash Playbook [View article]
It's nice to see such a thoroughly well researched article on here. I have been long ACI for the past few months; the play (so far) has been to add when it hits the 13s and lighten up shortly thereafter as it has quickly shown an ability to bounce back. It is quickly approaching the 13s again so it might be time for another quick flip. It got on my radar when I was looking into ICO last year; unfortunately I missed that boat. I will look into BTU and see if that's a better replacement after ACI's next bounce to $16.
How Gold Performs During A Financial Crash [View article]
Has anyone looked into writing the weekly covered calls or call spreads on GLD? Seems like a great way to create income owning it. I'm starting to research buying somewhere aroung the $100 Jan 2013 GLD calls, and writing the weekly's somewhere between 3-5% out of the money for income. The time decay over the course of 1 week is great, and there is very little time premium on the $100s (somewhere between $2-5 depending how close to the bid you can pick it up).
ATP Preferred Convertible: For the More Risk Averse Investor, Worth a Serious Look [View article]
That is correct- I simply was trying to convey that it is for a more conservative investor than the common shareholders. I wanted that to simply be mentioned in the article, not right in the title so it's the first thing anyone picks up on.
ATP Preferred Convertible: For the More Risk Averse Investor, Worth a Serious Look [View article]
This was meant to compare the convertible to the common for people that expect it to actually reach the conversion price at some point in the future. In order for someone to purchase this they have to be bullish on the stock to begin with. If someone thinks it is going to 5, 7, 9 then they shouldn't touch any type of security. I agree with the title is misleading, I didn't submit that title. The purpose was to say this is a good potential play for more risk averse investors than would just own the ATP common or options.
The return is also difficult to calculate if it goes down at this point because I don't know what premium it will continue to trade at, and it also depends on the timeframe as to the number of dividends collected. Just wanted to give a recap for people to get started and then do their own further research.
23 Cheap Stocks Poised for a Comeback [View article]
Seems like a good list to do some more research on. I'm a little overweight energy so I'd like to find a couple defensive plays that I can write covered calls on and ride out a potential dip.
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Slight correction to my description of the Cisco spread. I am long the 2013 12.50 call, and short the 2012 22.50 call. This allows for me to create another spread after the 2012 expires.
BlackBerry - An Investing Strategy Post Earnings To Generate Income [View article]
An Excellent Risk/Reward Profile Using This High Beta Covered Call Strategy [View article]
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Revisiting 7 Successful Portfolio Hedges [View article]
Thank you for your interest. Theoretically shorting a long ETF could work better, however in practice there are some issues. The first is that there is a borrowing cost to shorting anything, and therefore any gain from the tracking error is lost. The second would be the potential margin issue if your portfolio has little free buying power due to other factors (sold puts, other shorts, already on margin, etc...). Also if the bottom dropped out of the market you will have limited your hedging ability, and actually lose hedging power as the market drops (since your short liability would decrease, the percentage gain as part of the portfolio would drop as the price drops) and require rebalancing. Taking a very small out of the money put position in UPRO can give you the most bang for your buck, but this requires excellent market timing. There are no easy answers unfortunately.
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ATP Preferred Convertible: For the More Risk Averse Investor, Worth a Serious Look [View article]
ATP Preferred Convertible: For the More Risk Averse Investor, Worth a Serious Look [View article]
The return is also difficult to calculate if it goes down at this point because I don't know what premium it will continue to trade at, and it also depends on the timeframe as to the number of dividends collected. Just wanted to give a recap for people to get started and then do their own further research.
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