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Posts Tagged ‘BP’

Possible New Trades

Posted by mounddweller on May 20, 2012

Fellow Traders,

OK, I promise this is my last post of the day.  Four in one day is enough.  In this post I want to share a few of the trades I’m considering in the week coming up.

First, is Freeport-McMoRan Copper and Gold (FCX).  It closed Friday at $31.81.  Over the past two years it has bounced off of support at $30 twice.  The JUN $30 puts are at $0.94 bid.  The $29 puts are at $0.69 bid.

Second, is British Petroleum (BP).  It closed Friday at $37.10.  Other than during its Gulf of Mexico crisis a couple of years ago it has exhibited good support at $35.  The $34 put is at $0.40 bid.  My buddy Ed didn’t have much good to say about BP so I’m leary of this one.  However, someone who likes BP might find this to be a good trade.

Last, but certainly not least is Applied Materials (AMAT).  Some of you may recall I traded this one at the beginning of the year.  In that trade when AMAT was at $10.21 I sold the JAN13 $10 puts at $1.57.  One month later I bought to close the puts for $0.75.  AMAT is now back down $10.36.  The JAN13 $10 put is at $1.07 bid.  I like AMAT at $10 or less.  With this trade I make over 10% ROIC if I don’t have the stock put to me.  If I do have the stock put to me at $10, I will own it at a net cost of $8.11 (10 + 1.57 – 0.75 + 1.07).  With an annual dividend of $0.36 and a net cost of $8.11 I would own AMAT with a dividend yield of 4.4%.  I like this trade.

Other stocks I’m keeping my eye on if the market continues lower include: WM, INTC, ADI, GLW, WAG, and MCD.

Regards,

Troy

 

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Weekly NP Strategy – OCT14 Exp

Posted by mounddweller on October 6, 2011

Fellow Traders,

Once again the market has exhibited its schizophrenic behavior.  After dropping sharply it has once again jumped up above 11,000.  Consequently, I am hesitant to recommend anything from the weekly NP selections this week for fear it will drop right back down again next week.  In this environment it is better to sell puts on a huge down day.  Thus, here’s what I’m planning to do.  If tomorrow is a down day I may consider some of the blue-chip names on the list.  I’d really like to sell some puts tomorrow because Monday is a holiday and the market will be closed.  That gives us one less day of exposure before expiration next Friday.  If tomorrow is an up day I’ll likely write this week off and look ahead to the last week of the monthly expiration cycle.

Here are the blue-chippers from the list that I’ll be keeping an eye on:

CSCO  – stock seems to have found a bottom.  Would look to sell the $15s.

INTC – doubtful it will fall enough to generate any meaningful premium on the $20s.  Not interested in selling puts at $21 or higher

BP – Would be interested in selling the $34s if BP sold off again.

HPQ – Might consider the $22s if the price was right.

That’s about it folks.  Even though 197 trades meet our selection criteria there isn’t much that appeals to me in this market.  I have posted the complete list of possible trades out on the Yahoo Weekly Options group board.  You can find it here: http://finance.groups.yahoo.com/group/weeklyoptions/files/

Regards,

Troy

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Weekly NP Strategy – SEP 23 Exp

Posted by mounddweller on September 15, 2011

Fellow Traders,

We have a total of 77 trades to consider this week for the Weekly NP Strategy.

Of these 3 caught my eye, BP, SU, and ORCL.

Let’s first consider BP.  BP like most every other stock has bounced off of its recent lows.  It closed today at $39.52 and we have the opportunity to sell the $37 strike price.  I would like BP at the $36 strike much better, but the $37 isn’t bad.  I think this might be worth a look.

Next up is ORCL.  Like BP I would be happier if we could sell the put one strike further out of the money.  With ORCL we can sell the $26 put.  ORCL has strong support at $26 but even better support at $25.

Last, but not least, we have another oil and gas company.  However, this one is a foreign operator.  Suncor is a Canadian oil sands company.

Suncor looks good at the $28 strike.  The $52-wk low is $28.12.

Well, that’s it for tonight.  I’ll be back later this week-end with posts discussing the end of the SEP expiration period and presenting a first look at our OCT opportunities.

Regards,

Troy

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Weekly NP Strategy – First Results

Posted by mounddweller on September 3, 2011

Fellow Traders,

Well our first week of selecting weekly NP trades has concluded.  Let’s take a look at how my choices faired.   You’ll recall my choices were:

(1) The $36 strike of BP Exploration (BP) which had closed the previous day at $38.19 closed OTM yesterday at $36.53

(2) The $26 strike of Research in Motion (RIMM) which had closed at $28.19 the previous day closed OTM yesterday at $30.12

(3) The $35 strike of Silver Wheaton (SLW) which had closed at $39.41 the previous day closed OTM yesterday at $40.71

(4) The $28 strike of Suncor Energy (SU) which had closed at $30.31 the previous day closed OTM yesterday at $30.41.

Hey, how about that!  4 for 4.  We’re off to a great start testing the possibilities of this Weekly NP Strategy.  Given the market’s performance Friday I suspect this next week may be a little more challenging.

Hope everyone is enjoying their Labor Day weekend.

Regards,

Troy

 

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