The Money Tree

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Posts Tagged ‘ESV’

MAR Wrap-up and New APR Trades

Posted by mounddweller on March 20, 2011

Fellow Traders,

Like many of you I’ve spent a good portion of this weekend reviewing how I did in March and looking for potential April trades.  Here’s a brief recap of my March activity.  First, my closed trades:

(1) Back on February 4th I sold 4 MRK MAR $31 puts at $0.35.  After commissions I netted $128.03.  These puts expired OTM.

(2) On February 28th I sold 3 RVBD MAR $35 puts at $0.45.  After commissions I netted $123.77.  This was one of my Deep OTM NP Strategy selections.  The puts expired OTM.

Now, onto my trades which remained open.

(1) First Exelon (EXC).  I started this trade almost one year ago, back on April 16th.  My most recent activity includes selling 2 APR $43 calls at $0.90 and then buying them back late last week at $0.30.  Also, earlier this month I sold 3 APR $40 puts at $0.50.  Between selling calls and puts, and the dividends received I have reduced my cost basis from $42.50 to $37.46.

(2) Next up is Hugoton Royalty Trust (HGT).  This is my third trade in HGT.  The first two were very successful.  I initiated this third trade back on March 1st, buying 500 shares of HGT at $21.50.  On March 17th I sold 5 AUG $22.50 calls at $0.80.    The strategy with HGT is to buy the shares, sell calls 4-6 month out, and then collect monthly dividends.

(3) CSCO is my next open position.  Back on February 10th I opened this trade by selling 5 MAR $18 puts at $0.21.  On Friday I rolled these puts out to JUN for a $0.70 net credit.

(4) NOK is up next.  I did a buy/write on them back on March 11th at a net debit of $8.17.  I sold the APR $9 calls. 

(5) My remaining open position is in Getty (GTY).  On March 14th I sold 5 MAR $22.50 puts at $0.55.  These puts expired ITM and thus I will have 500 shares of GTY put to me at $22.50 on Monday morning.  My plan is to sell the JUN $25 calls at $0.75 and collect the $0.48 dividend which will be paid in mid-April.

Now onto my my list of potential trades for April.

Let’s briefly look at each of these.

(1) First up is Gamestop (GME).  You’ll notice I have them listed twice.  That’s because I can’t decide which trade I like better.  I like the ROIC with the $19 put and I have traded GME at this strike price with good results before.  However, I like the $18 strike because there is better support at this price.

 (2) Next is CSCO.  As I mentioned above I am already short 5 contracts at the $18 strike.  This trade expands my position by selling more puts at a much lower strike.

(3) Aflac (AFL) is my next pick.  It has fallen sharply because of the tremendous disaster in Japan where it does a lot of business.  It closed at $50.47 on Friday well off its 52-wk high of $59.54.

(4) JNJ is up next.  I ‘borrowed’ this pick from by investing buddy Teddi over at www.fullyinformed.com.  JNJ is approaching bargain territory so this is a good trade despite the sparcity of DSP.

(5) AT&T (T) is fast approaching their ex-dividend date and is trading at a nice price.  Thus, I’m happy to enter a buy/write trade here and reinitiate a position in T.

(6) Last up is GTY which I discussed up above.  As I said before I intend to sell CCs against the shares I’m acquiring tomorrow.  With a dividend yield in excess of 8% I won’t mind holding this one for awhile.

Best of luck to all my readers out there.  Let me know your thoughts on my trades and I would enjoy hearing what trades you’re considering.

Regards,

Troy

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Posted in Portfolio Updates, Potential Trades, Troy's New Picks! | Tagged: , , , , , , , , , , , , | 4 Comments »

Update – ESV NP Trade

Posted by mounddweller on June 1, 2010

All,

I need to issue a retraction regarding some of my comments in my earlier post on my new ESV trade.  Please note:

ESV has 2 deepwater rigs currently operating in the Gulf of Mexico.

This is what happens when you are in a hurry and don’t take time to verify information you’ve read elsewhere.  I read an article earlier today on SeekingAlpha that said ENSCO’s latest Fleet Status Report dated 5/14/2010 indicated that they did not have any deepwater rigs operating in the gulf.  If I had done two more minutes worth of DD I would have found that the information on SeekingAlpha was not correct.

ENSCO, in fact, has 2 deepwater rigs operating in the gulf, the ENSCO 8500 and 8501.  In addition, their newest deepwater rig, the ENSCO 8502, is currently under contract to begin operations in the gulf in August 2010.  Below is a link to the latest ENSCO Fleet Status Report dated 5/14/2010.

http://www.enscoplc.com/UploadFiles/File/05-14-10%208K%20Rig%20Status(1).pdf

I apologize for any confusion this may have caused.  In addition, I want to thank one of my readers, “dealmakr”,  for bringing this to my attention.  I encourage you to read his thoughts on ENSCO.  They are posted as a comment to my original ESV post.

Finally, I’ll close by reiterating that I’m still comfortable with my ESV trade.  As I mentioned in my original post, they have a rock solid balance sheet and strong growth opportunities.  If I have the stock put to me at $30 I will not be upset.

Regards,

Troy

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New NP Trade – ESV

Posted by mounddweller on June 1, 2010

All,

Sold 3 JUN ESV $30 puts at $0.45 this morning.  ESV is a oilfield services
company.  Historically they owned/operated a fleet of jack-up rigs.  Currently
they are midway through a multi-year expansion into acquiring a deepwater fleet
of rigs.  Because of the disaster in the gulf they have been beaten down from
$51 to almost $35.  They have an excellent balance sheet and pay a small
dividend.  I anticipate they will begin increasing the dividend after they have
completed the buildout of their deepwater fleet.  They used to be headquartered
here in Dallas but recently moved to London.  Their shares now trade as ADRs.   FYI…they currently do not have any deepwater rigs operating in the gulf!  It seems to me the market has ‘thrown the baby out with the bath water’.

My $30 puts yield 1.5% and have 17% downside protection.  Ron’s PF = 2.96.  With
only 17 days to expiration, I think it is a good trade.

Regards,
Troy

Posted in Troy's New Picks! | Tagged: , | 2 Comments »