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Fear & Greed Trader
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Independent Financial Advisor / Professional Investor- with over 25 years of navigating the Stock market's "fear and greed" cycles that challenge the average investor. Investment strategies that combine Theory, Practice and Experience to produce Portfolios focused on achieving positive... More
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  • Call Writing Strategy - Part 5 Adding SNDK 0 comments
    Aug 26, 2013 2:05 PM | about stocks: EBAY, LAZ, LVS, RIG, WDC

    After reviewing the status of the "call" portfolio, I decided to add another position (SNDK) with an October expiration date.

    All of the previous additions & activity can be viewed here on this blog.

    last update was here : http://seekingalpha.com/instablog/706857-fear-greedtrader/2137592-call-writing-strategy-part-4-update

    Purchased 500 Shs. of SNDK @ 56.74 and sold the Oct $57.50 call for @2.60. We will bring in $1,290 in income if the stock is not "called away". That will equate to a 4.5% yield from today Aug. 26th until Oct. 18th ,which is approximately 7 weeks from now.

    If in fact the shares are called, the position will yield 5.9% for the same time period.

    Below is the table with the new trade added :

    (click to enlarge)

    (SNDK) represents good value at these levels with solid growth and a forward PE of 11.4 After the company's latest earnings report they initiated a dividend (yield 1.6%) and announced an expansion of their buyback program to 2.5B . All positive news from SNDK, and if the shares are not taken , we will effectively have purchased the stock @ $54.14. With the company being in the "tech" space it adds diversity to the holdings. Something to keep in mind , just in case we experience a market sell off and we are left holding these positions.

    Disclosure: I am long EBAY, LAZ, LVS, RIG, SNDK.

    Additional disclosure: stocks4income@usa.com

    Stocks: EBAY, LAZ, LVS, RIG, WDC
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