The Money Tree

Safely Generating Income in Retirement

Weekly NP Strategy – OCT 28 Results

Posted by mounddweller on October 28, 2011

Fellow Traders,

Last week I chose 3 trades from our Weekly NP Strategy selections.  You’ll recall my 3 chosen trades involved AA, HPQ, and SLW.  Let’s take a look and see how the trades turned out.

First up is Alcoa (AA).  When I selected AA it was trading at $9.95 and the OCT28 $9 put was trading at $0.05 bid.  Today, AA closed well OTM at $11.57.  Before commissions the ROIC for the 8 day holding period was 0.56%.  Annualized that comes out to 25.35%.

Next up is Hewlett Packard (HPQ).  You’ll recall HPQ has had a difficult time of late.  Shoddy management with poor decision making and a volatile market had driven it down to levels not seen in quite some time.  Because of this I felt comfortable selecting it as a potential trade.  When I selected HPQ it was trading at $24.74 and the OCT28 $23 put was trading at $0.21 bid.  HPQ closed today at $27.95.  Our 8 day ROIC was 0.91%.  Annualized this return is an outstanding 41.66%.

Last, we have Silver Wheaton (SLW).  SLW has been on a roller coster ride as well as it closely tracks the price of silver.  When I selected this trade SLW had closed at $29.09 and the OCT28 $25 put was at $0.15 bid.  Today SLW closed at $35.97.  The 8 day ROIC was 0.6%.  Annualized this comes out to a very respectable 27.38%.

Clearly, if one can consistently find trades like these a Weekly NP Strategy can generate a significant return.

Well, that’s it for today.  I’ll be back later this weekend with the Deep OTM NP Strategy NOV Week 3 selections.

Regards,

Troy

One Response to “Weekly NP Strategy – OCT 28 Results”

  1. Rich said

    Troy,

    On thursday 27 Oct I put in a sell limit order to open 1 AA 28 Oct 11 put @ .16 If my order is processed I would get ROC of .7% for one day. If the AA put closes in the money tommorrow I will be assigned shares at $11. The ex-div date for AA is 2 Nov so I would qualify for the dividend if the shares were put to me. That would increase the yield to about .9%

    I would turn around monday and sell a covered call on the shares to exp next friday, 4 Nov. Thats the plan.

    As it turned out, with the thursday rally and the fridays action my put closed out of the money. Made the .7% for one day at risk. Your right, you can get some good returns with the weeklies. You need to have cash handy and I have a watch list of about 10 stocks I watch. I bounce when I see a risk I’m willing to take.

    Rich

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