The Money Tree

Safely Generating Income in Retirement

Posts Tagged ‘TK’

Potential September Trades

Posted by mounddweller on August 23, 2009

I’m having a real hard time this month finding anything spectacular.  I can talk
myself out of most anything that looks remotely interesting.  Here’s what I’ve
considered thus far (in order of preference):

(1) FLIR – Stock closed Friday at $23.08.  BL is $23.95.  Stock is trading in
the middle of the V and hasn’t ran up a great gob from its 52-wk low of $18.81. 
Looking at doing an ITM buy/write on the SEP $22.5 calls with a net debit of
$21.90.  That would give me an ROIC of around 2.6%.  Not great, but given the
low volatility of late, I’ll take it.

(2) SYK – Stock closed Friday at $41.76, over the BL of $40.36.  Stock is well
off its 52-wk low of $30.82 but is still solidly in the V.  This is a first
class company.  However, for trading purposes I would like it alot more if it
were less than $40.  I’m considering opening a small position by buying at the
market and selling the ATM $42 calls for $1.00.  This would give me an ROIC of
2.97%.  Again, not great, but I’m not willing to trade the riskier stocks in
this market just for higher yield.

(3) BLUD – Stock closed Friday at $18.46 well above the BL of $16.88.  I would
like this one alot more if it had options available in $1 increments.  The SEP
$20 calls are too far OTM to have any premium and the ITM SEP $17.5 calls don’t
yield much either.  If I decide to do a trade in BLUD I suspect I’ll write the
ITM SEP $17.5 calls which at current prices would give me an ROIC of 2.11%.

(4) TK – Stock has run back up to $18.90.  I’m considering selling the SEP $17.5
NPs for $0.40.  That has an ROIC of 2.29%.  More than likely though I’ll hold
off doing this trade and see if I can get a better price on a down day. 
Ideally, I’d rather be selling the SEP $15 NPs.

(5) AA – Sell NPs on the SEP $11 puts for $0.22 or better.  Stock is well
extended above it’s 52-wk low but is still in the V.  However, it is above the
BL.  The PF for the SEP $11 puts is OK at 1.6.  Stock has negative net cash.   (Many thanks to Rich for posting his comments and for pointing out AA to me).

I also looked at re-selling NPs on IPI and O but didn’t like the risk/reward
ratios at any strike price. 

Regards,
Troy

Advertisements

Posted in Potential Trades | Tagged: , , , , , , | 3 Comments »

August Month-end Wrap Up

Posted by mounddweller on August 23, 2009

Well, what a month!  Almost everything in my CC/NP was called away, including my position in FRX which had been open for over 6 months.  Below is a quick recap of what transpired this month.

FRX – As I mentioned above, after 7 months of selling CC and NP on FRX I finally had the stock called away from me.  I originally entered this position in January at $25.60/share.  Over the months I had additional shares put to me at $22.50.  In addition, I sold CCs almost every month.  The end result was a total return of 18.51%, or 30.56% annualized.

GME – Sold ITM calls and OTM puts last month.  Despite the sell-off after they announced earnings I still ended up in the ‘sweet spot’  having my calls assigned and my puts expire worthless.  My one-month return was 5.37%, or 56.03% annnualized.

IPI, O, and TK – Sold NPs on these stocks.  All expired worthless.  My one-month returns were 2.1%, 2.31%, and 1.8% respectively.

My only remaining open position is my NP position in UNG.  For a description of what transpired with it see my post from earlier this evening.

I’ll be back shortly with another post regarding what new trades look intersting for the week ahead.

Regards,

Troy

Posted in Uncategorized | Tagged: , , , , , , | Leave a Comment »

New NP Trade – TK

Posted by mounddweller on July 29, 2009

I sold a new round of naked puts on TK this morning.  Below are the pertinent details.

STO 4 TK AUG $15 puts at $0.30

ROIC = 2.00% (.3 / 15), Annualized 29.2%

Downside protection to strike price = 10.93%

Since I have traded NP on TK previously I will not bore you with a long-winded discussion on why I like TK or this particular trade.  Instead, if you’re interested in these details, I recommend you go back and read my earlier post regarding TK dated June 22.

NOTE:  For those of you who are new to my blog or don’t recall the details of my earlier trades in TK, I want to make it clear that I’m not selling these puts as a short-term trade.  I want to own TK long-term and am trying to accumulate a position in TK.  Thus, my trading strategy for TK is somewhat different than that of my other NP trades.

Here is an updated chart of TK.

VISIONS - TK Updated Chart

Posted in Troy's New Picks! | Tagged: , | 5 Comments »

New NP Trade – TK

Posted by mounddweller on June 22, 2009

All,

First and foremost let me be very clear, this is unlike any of my recent NP trades.  For the past several months all of my NP trades have had the following objective and risk profile:

Objective: Achieve > 2.5% ROIC by selling NPs at a strike price where I feel there is little probability of having the stock put to me.

Risk Profile: (1) > 10% downside protection, (2) strike price < 52-wk low or significant level of support.

This TK trade is different.  This is not a short-term trade.  I want to own TK long-term.  However, I think the current price is a little high so I’m going to sell naked puts at a strike price where I wouldn’t mind owning the stock.  My objective is to accumulate 700-900 shares at an average cost of around $15. 

So today I sold 2 TK JUL $17.5 puts at $0.70.   The stock has fallen sharply over the past few days from a recent high of $23.48.  This follows an equally rapid rise from a low of $15.55 back on June 3rd.  The sharp increase in price was due to a short squeeze.  I suspect the sell-off reflects a return to the previous trend.

This is not my first NP trade in TK.  TK originally caught my eye back on June 3rd.  At that time I sold 2 JUN $15 puts for $0.70.  During the subsequent short squeeze I bought them back for $0.05.  My thought was I might have another opportunity to sell them again prior to expiration if TK fell.

So, I’m guessing some of you might be wondering why I didn’t originally post my first trade here on my blog.  Well, quite simply because it didn’t fit my earlier trade pattern and I thought it might ‘muddy the waters’ so to speak.  But, in rethinking through my goals of this blog I decided that if I used Ron’s VISIONS approach and software to identify the opportunity and time the trade then I should record it on the blog.

Below you’ll find my complete trading history in TK and a copy of the TK price chart.

TK Transactions

 

 

 

VISIONS - TK Chart

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