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Archive for August, 2009

Potential September Trades

Posted by mounddweller on August 23, 2009

I’m having a real hard time this month finding anything spectacular.  I can talk
myself out of most anything that looks remotely interesting.  Here’s what I’ve
considered thus far (in order of preference):

(1) FLIR – Stock closed Friday at $23.08.  BL is $23.95.  Stock is trading in
the middle of the V and hasn’t ran up a great gob from its 52-wk low of $18.81. 
Looking at doing an ITM buy/write on the SEP $22.5 calls with a net debit of
$21.90.  That would give me an ROIC of around 2.6%.  Not great, but given the
low volatility of late, I’ll take it.

(2) SYK – Stock closed Friday at $41.76, over the BL of $40.36.  Stock is well
off its 52-wk low of $30.82 but is still solidly in the V.  This is a first
class company.  However, for trading purposes I would like it alot more if it
were less than $40.  I’m considering opening a small position by buying at the
market and selling the ATM $42 calls for $1.00.  This would give me an ROIC of
2.97%.  Again, not great, but I’m not willing to trade the riskier stocks in
this market just for higher yield.

(3) BLUD – Stock closed Friday at $18.46 well above the BL of $16.88.  I would
like this one alot more if it had options available in $1 increments.  The SEP
$20 calls are too far OTM to have any premium and the ITM SEP $17.5 calls don’t
yield much either.  If I decide to do a trade in BLUD I suspect I’ll write the
ITM SEP $17.5 calls which at current prices would give me an ROIC of 2.11%.

(4) TK – Stock has run back up to $18.90.  I’m considering selling the SEP $17.5
NPs for $0.40.  That has an ROIC of 2.29%.  More than likely though I’ll hold
off doing this trade and see if I can get a better price on a down day. 
Ideally, I’d rather be selling the SEP $15 NPs.

(5) AA – Sell NPs on the SEP $11 puts for $0.22 or better.  Stock is well
extended above it’s 52-wk low but is still in the V.  However, it is above the
BL.  The PF for the SEP $11 puts is OK at 1.6.  Stock has negative net cash.   (Many thanks to Rich for posting his comments and for pointing out AA to me).

I also looked at re-selling NPs on IPI and O but didn’t like the risk/reward
ratios at any strike price. 


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August Month-end Wrap Up

Posted by mounddweller on August 23, 2009

Well, what a month!  Almost everything in my CC/NP was called away, including my position in FRX which had been open for over 6 months.  Below is a quick recap of what transpired this month.

FRX – As I mentioned above, after 7 months of selling CC and NP on FRX I finally had the stock called away from me.  I originally entered this position in January at $25.60/share.  Over the months I had additional shares put to me at $22.50.  In addition, I sold CCs almost every month.  The end result was a total return of 18.51%, or 30.56% annualized.

GME – Sold ITM calls and OTM puts last month.  Despite the sell-off after they announced earnings I still ended up in the ‘sweet spot’  having my calls assigned and my puts expire worthless.  My one-month return was 5.37%, or 56.03% annnualized.

IPI, O, and TK – Sold NPs on these stocks.  All expired worthless.  My one-month returns were 2.1%, 2.31%, and 1.8% respectively.

My only remaining open position is my NP position in UNG.  For a description of what transpired with it see my post from earlier this evening.

I’ll be back shortly with another post regarding what new trades look intersting for the week ahead.



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Rollout on UNG

Posted by mounddweller on August 23, 2009

I executed a rollout on my NP position in UNG on Friday.  You’ll recall I did the same thing last month.  However, last month I was able to get a net credit of $0.70 on my roll from the JUL $13 puts to the AUG $13 puts.  This month due to UNG being well under $12/share I was only able to roll for a $0.30 credit.  This gives me a ROIC of 2.31% (.3/13).  If all goes well natural gas prices will recover in the next month or so and I’ll either be able to exit the position or roll again for a much better net credit. 

The chart below summarizes all of my NP trades in UNG todate.  The net sum of these transactions is around $1,276 generated over a 3-month period, thus giving me a cumulative ROIC of almost 10%.

BLOG - UNG Position

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