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Archive for July 26th, 2012

Trade Update – WAG

Posted by mounddweller on July 26, 2012

Fellow Traders,

I’ve been lax lately in posting all of my trades.  Over the next several days I hope to catch you up on what I’ve been doing lately.  As volatility has picked up so has my trading.

First, I’d like to tell you about my recent trade in Walgreens (WAG).  Some readers may recall I executed a trade in WAG earlier this year.  You can read more about WAG and that trade here:

My most recent trade in WAG was similar to my earlier one.  Specifically, on June 19th I sold to open (STO) 3 JUL $30 puts at $0.68, netting $194.25 after commissions.  At the time WAG was trading at $30.09, pretty much ATM.  For some time it appeared I might have to roll the puts or have the stock put to me at $30.  However, a few days prior to expiration Walgreens and Express Scripts announced they had inked a new multi-year agreement.  WAG jumped over 10% on the announcement.  At expiration on July 21st it was trading at $34.60.

Having netted $194.25, my cash secured puts generated a 32-day ROIC of 1.62%.  Annualized, this equates to 18.46%.

In the months ahead, if we get another sell-off, I’ll be looking to enter another trade in WAG at the $30 strike.





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