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Posts Tagged ‘MRK’

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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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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MRK – New NP Trade

Posted by mounddweller on February 4, 2011

Fellow Traders,

I executed a new naked put trade today on Merck (MRK).  Specifically, I STO 4 MAR $31 puts at $0.35.  Merck is a large multi-national pharmaceutical company that has fallen out of favor since its late 2009 purchase of the Schering-Plough Corporation.   As you can see in the below one year chart, MRK has been range bound for several months.  Roughly it has been trading between $34 and $37.50.    It recently broke to the downside of this range, however it’s 52-wk low is $30.70.  Thus, I think selling the MAR $31 puts is a fairly low risk trade.  If assigned, my net cost will be $30.65, just below the 52-wk low and I will own a stock with a dividend yield of 4.96%.

One additional reason I executed this trade, look at the money flow indicator.  It bounced off a severely oversold level of 20 just a few days ago.  That leads me to believe that by March expiration Merck will have rebounded back into its trading range.  Only time will tell if I’m right.

Best of luck to all my trading buddies.

Regards,

Troy

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