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Posts Tagged ‘CHRW’

Results – July 2013

Posted by mounddweller on July 31, 2013

Fellow Traders,

July is history.  Wow, 2013 is going quickly.  July turned out to be a good month.  Let’s check those results.

Number of Closed Positions: 7

Profit on Closed Trades: $1,272.00

Total Capital Used on Closed Trades: $71,350.00

Average Number of Days Trades Were Open: 24.6

Return on Invested Capital: 1.78%

Let’s dig a little deeper into these 7 closed trades.  All 7 of the closed trades involved naked puts.  Six of the seven expired OTM.  The other one was my ‘day-trade’ in POT which I wrote about yesterday.  I had puts expire in CHRW, CAT, KO, TEVA, and two positions in LNCO.  I sold the CHRW JUL $55 puts at $1.10 when CHRW was at $55.97 (it has strong support at $55).  The puts expired OTM with CHRW closing at $60.60.  CAT was at $83.86 when I sold the JUL $80 puts for $1.00.  At expiration CAT closed at $85.65.  My first time trading KO also turned out well, I sold the JUL $38 puts at $0.40 when KO was at $39.54.  They expired OTM with KO trading at $41.09.  Last up are my two trades in LNCO.  With LNCO trading around $30.70 I sold the JUL $27.50 and JUL $25 puts at $1.05 and $0.55 respectively.  It was a wild ride.  LNCO dropped to an intra-day low of $23.03 on July 5 before recovering to close on expiration at 32.18.

Now let’s look at my open trades.

Number of Open Positions: 7 (in 5 stocks)

Net Cash Flow in July from Open Positions: $(110.45)

Total Capital Used on Open Trades: $65,662.93

Net Cash Flow on Invested Capital: (0.168%)

Currently I have open positions in EXC, GDX, OKE, MSFT, and SUNE (WFR).   Let’s look at each one starting with EXC.  I just can’t seem to find the right rhythm with EXC.  If I weren’t wanting to re-establish a long-term position in this company I would have given up long ago and moved onto trading something else.  Long time readers will recall that I had a position in EXC that got called away in 2012.  Since then I have been trying to build a new position.  In May I started by selling the JUN $34 puts.  As EXC continued to move up more I feared having it run away from me so I lost my patience and bought 200 shares at $35.55 only to see it begin to fall almost immediately.  I ended up having to roll the JUN $34 puts out and down to JAN $33 for a small credit.  Then in June I sold more puts at the $32 strike.  As these went ITM I rolled them down and out as well to the JUL $31 puts.  When the JUL $31 puts went ITM I decided to cut my losses and bought to close them for a small debit.  Again, my patience cost me.  EXC bounced and closed at JUL expiration above $31.  Had I been more patient they would have expired OTM.  Finally, to finish the EXC saga for this month, today I sold some AUG $30 puts at $0.40 in an effort to reduce the debit I created when I closed the JUL $31 puts too early.  All of this activity has put me at just about at break-even.  The only one getting rich on this trade is my broker.

Let’s move onto my remaining open trades.  I won’t bore you with any more details on GDX.  It continues to hover between $26-$28.  I am way under water on this trade.  Next up is OKE.  Like, EXC I’m having trouble figuring this one out.  This is another company I’m trying to establish a long-term position in.  Back in May I sold JUN puts at the $47.50 strike.  Shortly thereafter the bottom fell out on the stock and I ended up rolling my position down and out to the JAN $45 puts for a $0.30 net credit.  Then in June I sold another round of JUL puts at the $42.50 strike.  When OKE fell below $42.50 I decided to close that position and began looking to sell something else further out and down for a credit.  Alas, like with EXC, had I just been patient the JUL $42.50 would have expired OTM.

OK, not all of my open positions are basket cases.  I actually have two open positions that are performing well.  I am short MSFT AUG $30 puts.  I opened the trade on July 19 selling the AUG $30 puts for $0.39 while MSFT was at $31.06.  I have no reason to believe these won’t expire OTM.

My last open position is in SUNE (WFR).  You’ll recall last month that I mentioned that I had sold the JUL $10 calls at $0.25.  These ended up expiring OTM so I wrote another round of calls for August also at the $10 strike.  I was able to sell these for $0.68.  SUNE has been on both sides of $10 this week so time will tell if I’ll get called away at expiration or be able to write another round of calls.

 

Going into August I am considering another round of naked put trades TEVA, CAT, CHRW, and CCJ.  All are once again approaching key support levels.

Regards,

Troy

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Results – June 2013

Posted by mounddweller on June 29, 2013

Fellow Traders,

Another month has flown by exceedingly fast.  It has been a bumpy ride what with the mini-correction.  Let’s take a look and see how I did.

Number of Closed Positions: 2

Profit on Closed Trades: $235.10

Total Capital Used on Closed Trades: $20,050.00

Average Number of Days Trades Were Open: 31.5

Return on Invested Capital: 1.17%

OK, before I move on to the stats for my open trades, let me tell you a little more about these closed trades.  Both of the closed trades were naked puts.   Both expired OTM.  My first trade was Merck (MRK).  I sold the JUN $44 puts back on May 9 for $0.64.  At the time MRK was trading at $45.33.  It peaked at over $49 in early June and is now heading back down and approaching resistance.  I’ve got it on my radar screen and will definitely trade it again once it gets a little lower.  Friday it closed at $46.45.  My other closed trade was in TEVA.  On June 3 I sold the JUN $37.50 puts for $0.42.  At the time TEVA was trading at $37.97.  I have been trading the TEVA naked puts at the $37.50 strike price for 3 months now.  It is trading at multi-year lows and I’d like to establish a long-term position in it.

Now let’s look at my open trades.

Number of Open Positions: 11 (in 8 stocks)

Net Cash Flow in June from Open Positions: $1,104.00

Total Capital Used on Open Trades: $112,012.93

Net Cash Flow on Invested Capital: 0.99%

This month I opened five new positions in CAT, CHRW, KO, OKE, and TEVA.   All are naked put trades.  I’m short CAT with the JUL $80 puts, CHRW at JUL $55, and KO at JUL $38 (first time I’ve ever traded KO!).  I opened a second position in OKE at JUL $42.50.  You’ll recall last month I sold the JUN $47.50 puts.  More about that later.  And last but not least I opened another round of TEVA JUL $37.50 puts.

Now let’s look at the 6 open positions I have that were carried over from prior months.  I still have my two deep ITM positions with GDX.  I’ve dug myself quite a hole in this one.  It will take quite some time to get back to even on these.  I’m short the SEP $41.50 puts and long stock which was put to me a couple months ago at $40.  I also have a previously opened position in OKE.  I originally sold the JUN $47.50 puts back in May.  I have since rolled these down to $45 and out to JAN.  I’ve also had to roll my two positions in EXC.  I rolled my JUN $34 out to JAN $33 and my JUN $32 out to JUL $31.  My last open position is a very old one.  Way back in May 2011 I initiated a trade in WFR.  Eventually I had the stock put to me at $10.  My position has laid dormant for quite some time as I was way under water.  Well, patience is a virtue.  The stock has now come back into favor with the boys on Wall Street and I was able to sell a JUL covered call at the $10 strike price.  By the way, WFR recently changed their name and their ticker symbol is now SUNE.

Going into July I am considering new trades in IBM and a repeat trade in MRK (as I mentioned above).

Regards,

Troy

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New Trade – CAT

Posted by mounddweller on June 15, 2013

Fellow Traders,

I executed a new trade today.  As I mentioned in my earlier post on CHRW, I’ve had my eye on CAT for some time now.   In just a moment I’ll explain my line of reasoning for this trade.

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide.  It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. The company was founded in 1925 and is headquartered in Peoria, Illinois.  (courtesy of Yahoo Finance)

Here are the specifics for my trade:

STO 2 JUL $80 puts at $1.00

This is not my first rodeo with CAT.  I’ve successfully traded it twice earlier this year.  I learned about the potential for trading puts in CAT from my investing friend and hero Teddi over at www.fullyinformed.com.  I’ve kept it on my watch list ever since.

Here’s why I like this trade right now…

(1) It is trading well down in the range its established over the past year ($80 – $90).  It did rally at the beginning of the year to $100 but has since fallen back into the trading range.

(2) Earlier this week it bounced off its lower Bollinger Band at around $83 and now appears to be trending back up.

(3) The slight uptick in volatility has increased option prices such that I could go for a lower strike price and still receive a decent premium

Here’s a 3-month price chart which shows the bounce off of the lower Bollinger Band.

BLOG - CAT 3M v2

So, why didn’t I sell the $82.50 puts?  Well, despite the bounce off the lower Bollinger Band being a good signal for a price reversal, with the current uncertainty in the overall market I decided I wanted a little less risk in this trade.  That coupled with the fact that CAT has strong support at $80.

Here’s a three year chart which shows the strong support at $80.

BLOG - CAT 3 Yr Chart

That’s it for this one.  I’m still keeping an eye on the NUE JUL $42 puts.  However it didn’t fade as much on Friday so I’ve elected to wait a bit longer before I pull the trigger on that one.

Regards,

Troy

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New Trade – CHRW

Posted by mounddweller on June 13, 2013

Fellow Traders,

I executed a new trade today.  I’ve had my eye on this one for some time now.   I sold puts on C. H. Robinson Worldwide (CHRW).

C.H. Robinson Worldwide, Inc., a third-party logistics company, provides freight transportation services and logistics solutions to companies in various industries worldwide. It offers transportation and logistics services, such as truckload, less than truckload, intermodal, ocean, and air freight transportation, as well as other logistics services, including transportation management, customs brokerage, and warehousing. The company has contractual relationships with approximately 56,000 transportation companies, including motor carriers, railroads, air freight, and ocean carriers. It also engages in buying, selling, and marketing fresh produce. It offers its fresh produce to grocery retailers, restaurants, produce wholesalers, and foodservice distributors through a network of independent produce growers and suppliers. The company operates through a network of 276 branch offices in North America, Europe, Asia, South America, and Australia. C.H. Robinson Worldwide, Inc. was founded in 1905 and is headquartered in Eden Prairie, Minnesota.  (courtesy of Yahoo Finance)

Here are the specifics for my trade:

STO 2 JUL $55 puts at $1.10

You’ll notice I didn’t go hog-wild with this one.  By that I mean I intentionally kept this a small trade.  I did so because I’ve never traded CHRW before and thus don’t have any experience in how volatile it is or an understanding of how it reacts to market and company specific news.

However, as I mentioned above I have had my eye on it for some time.  Here’s why…

(1) It is on my Dividend Superstars list

(a)  It has increased its dividend annually for the past 16 years

(b)  It’s dividend growth rate for the past 5 years is 12.9%

(c) It’s payout ratio is relatively low, only 38%, thus it has plenty of room to continue growing the dividend

(2) It is trading at multi-year lows

(3) It is trading at a significant level of support

(4) The first three reasons mean I wouldn’t mind owning it at this price and am interested in possibly establishing a longer-term position in it.

(5) Given the low level of volatility in the market, I liked the potential 2% ROIC if the puts expire worthless.

Here’s a one-year price chart which shows the strong support at $56.

BLOG - CHRW 1yr Chart

Here’s the three year chart which show just how far back the support at $56 extends.

BLOG - CHRW 3yr Chart

That’s it for this one.  Other trades I’m currently keeping an eye on include the NUE JUL $42 puts and the CAT JUL $80 puts.  Both ran away from me today but given the recent volatility I expect they’ll come back down and I’ll get another chance to pull the trigger.

Regards,

Troy

 

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New Trade – TEVA

Posted by mounddweller on June 3, 2013

Fellow Traders,

 

No, your eyes are not deceiving you and no a whole month hasn’t passed quite yet.  Yes, it’s only been one day since my last post.  This is my first effort to try to get better at writing more often and in a more timely manner relative to my trades.

So, here goes.  In my post yesterday I mentioned I was interested in TEVA.  Today, while TEVA was bouncing around just above and below $38, I decided the time was ripe to sell JUN puts at the $37.50 strike.  I put in a STO limit order on 3 contracts at $0.42.  A short time later my order filled when the underlying was trading at $37.97.

With only 19 days to expiration my ROIC is 1.12%.

This is my second trade in TEVA.  Last month I executed the same trade.  Those options expired OTM.  My objective with these trades is to acquire a block of shares in TEVA for my long-term portfolio.

TEVA is a pharmaceutical manufacturer.  It is headquartered in Israel.  It is the world leader in the manufacture of generic drugs.  It also manufacturers its own patent protected, proprietary drugs.  It is about to lose a patent on one of these drugs.  This has caused the stock to fall significantly.  The stock peaked at $63.75 in March 2010.  It bottomed out at $35.26 in September of 2011.  Since then it has bounced between $45 and $37.

The stock currently yields 2.8%  Over the past five years it has consistently raised its quarterly dividend from $0.13 to $0.32.  My intent is to acquire shares while it is out of favor and begin to collect its ever rising dividend.  When growth returns it will return to favor and the price will go back up.

That’s it for now.  I’ll be back later this week if I place any more trades.  I still have my eye on CHRW.

Regards,

Troy

 

 

 

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Dividend Superstars – Potential Trades

Posted by mounddweller on January 28, 2012

Fellow Traders,

As you know I recently announced a new strategy centered around strong, large-cap, “dividend superstar” companies.  Today I want to begin a series of posts which highlight stocks from the dividend superstar list which currently appear to have trade potential.

I will be selecting stocks using Ron Groenke’s VISIONS software.  Specifically, I will be looking for stocks which VISIONS has rated “Take Action” (TA).  This week the VISIONS scan of my dividend superstars list returned three possibilities, Best Buy (BBY), Infosys (INFY), and Tiffany (TIF).

Let’s first look at BBY.   Regular readers will remember I just recently successfully closed out a position in BBY.  You can read about it here: https://troysmoneytree.wordpress.com/2012/01/24/update-bby/

Friday, BBY closed at $25.44.  It has recovered from its 52-wk low of $21.79 which it hit back in October 2011.  It last reported earnings in December so it won’t report again until late March.  The trade which most appeals to me for BBY right now is the FEB $24 covered call.  The premium is $1.66.  Thus, the ROIC if assigned at expiration is 0.86%.  If unassigned the ROIC is 6.53%.

Next let’s look at Infosys (INFY).  INFY closed Friday at $54.31.  INFY has a 52-wk low of $46.12 which it hit back in September 2011.  Like BBY it has already announced quarterly earnings so we don’t have to worry about that.  For INFY, the best trade in my my opinion is the FEB $52.50 put.  It has a premium of $0.60.  This gives a ROIC of 1.14% with 3 weeks to expiration and down-side protection of 4.43%.

Last, but not least is Tiffany (TIF).  On Friday TIF closed at $63.49.  TIF has a 52-wk low of $54.58 which occurred in March 2011.  Like BBY and INFY, TIF has already announced quarterly earnings.  For TIF I like the FEB $60 put which is at $0.61 bid.  This gives a ROIC of just over 1.00% and DSP of 6.5%.

A final not before I close; there was a fourth stock which VISIONS rated TA.  It is CHRW.  However, I eliminated it from further consideration because it reports quarterly earnings on Tuesday, January 31.

If any of these selections interest you please conduct your own due-diligence.

Regards,

Troy

 

 

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