Monday, 22 June 2015

Short Put Option Expired Worthless - SNC Lavalin

On Friday June 19, a put option I sold in SNC Lavalin expired worthless, leaving me with $283.80 CAD in net premiums.

The trade can also be seen on my Options Page:

Jun/19/2015 Expired worthless
Nov/06/2014 Sold 1 SNC Jun 19 '15 $42 Put @ 2.95 ($11.20 commission)

Days Held (sell date to expiry): 224

Annualized Return = ($283.20 / ($4,200 - $283.20)) * 365/224 = 11.8%

So far this year, I'm doing ok with my options trades. I'm hoping to make up for some of the losses I'm experiencing with Ensco. That stock is really pissing me off and I've been considering the partial sale of my holdings to off-set taxes on my income from options.

Tuesday, 16 June 2015

New Purchase - ATCO Group

On May 11, I initiated a position in ATCO Group (ACO.X). The share price has since declined by about 10% so today I bought an additional 100 shares.

Number of shares purchased
100
Price per share
$40.50
Commission
$9.95
Total cost per share
$40.60
Total cost
$4,059.95
Annual dividend per share
$0.99
Initial dividend yield
2.44%
Increase in forward 12-month dividends
$99.00

It looks like Canadian Utilities and ATCO Group are hitting new lows because of concerns that the new Alberta government will implement a new tax regime. I believe both companies are well positioned to grow and my dividend yield analysis indicates that I'm getting good value for my money.


My annual dividend income now stands at $9,138 per year.

Monday, 15 June 2015

Options Trade - Suncor

I hold 200 shares of SU with and average price of $39.97. Shares are currently trading at $34.20, which leaves me with a 14% loss (on paper). Seems like an opportunity for averaging down or making some $$$ with a put option.

I came close to adding 100 shares of SU today but given that my portfolio is 17% in Energy, I don't want to increase my position too much in this sector...unless the price is a super deal. So I'm thinking SU at $32 would be a great deal.

On June 15, I sold a put in SU. The trade:

Sold 1 SU Put Dec 18 '15 $35 Put @ 3.15 ($11.20 commission)

Days Held (sell date to expiry): 186

Net Premium: $303.80

Annualized Return = ($303.80 / ($3,500 - $303.80)) * 365/186 = 18.7%

The most likely outcomes of this trade are:

1. Shares are trading above $35.00 at expiration. I will get to keep $303.80 in net premiums.

2. SU is trading below $35.00 at or before expiration and shares are assigned. I will receive 100 shares of SU at a net cost of $31.96/share.

3. Should the share price rise, I may BTC my put option. I did that with SU earlier this year, resulting in a 24.7% annualized return:

Apr/21/2015 BTC 1 SU Jun 19 '15 $36 Put @ 0.50 ($11.20 commission)

Dec/01/2014 Sold 1 SU Jun 19 '15 $36 Put @ 3.40 ($11.20 commission)Profit: $267.60

Friday, 12 June 2015

Options Trade - United Pacific

On June 10, I sold a put in UNP. The trade:

Sold 1 UNP Put Jan 20 '17 $100 Put @ 12.70 ($11.20 commission + $0.03 SEC fee)

Days Held (sell date to expiry): 590

Net Premium: $1,258.77

Annualized Return = ($1,258.77 / ($10,000 - $1,258.77)) * 365/590 = 8.9%

The most likely outcomes of this trade are:

1. Shares are trading above $100.00 at expiration. I will get to keep $1258.77 in net premiums.

2. UNP is trading below $100.00 at or before expiration and shares are assigned. I will receive 100 shares of UNP at a net cost of $87.41/share.

Tuesday, 9 June 2015

New Purchase - HCP // Options Trade - OHI

On June 9, I followed My Dividend Pipeline's lead and bought more HCP. Actually, I doubled my position and reduced my average cost by over 6%. I'm looking at averaging down on other positions as well.

Number of shares purchased
100
Price per share
$37.10
Commission
$9.95
Total cost per share
$37.20
Total cost
$3,719.95
Annual dividend per share
$2.26
Initial dividend yield
6.08%
Increase in forward 12-month dividends
$226.00


It takes balls to buy REITs and Oil & Gas in today's market, or maybe a vagina:


Anyhow, I finally got my annual dividend income to over $9,000, which would have been a hell of a lot easier had Ensco not cut its dividend.


On June 8, I sold a put in OHI. The trade:

Sold 1 OHI Put Dec 18 '15 $35 Put @ 2.80 ($11.20 commission + $0.01 SEC fee)
Days Held (sell date to expiry): 194
Net Premium: $268.79
Annualized Return = ($268.79 / ($3,500 - $268.79)) * 365/194 = 15.7%

The most likely outcomes of this trade are:

1. Shares are trading above $35.00 at expiration. I will get to keep $268.79 in net premiums.

2. OHI is trading below $35.00 at or before expiration and shares are assigned. I will receive 100 shares of OHI at a net cost of $32.31/share.

Friday, 5 June 2015

New Purchase - Baxter International

I've been buying shares of BAX since May 2013. Two years later, I'm still under water, so what better time to buy more.

When reading www.seekingalpha.com, I'm left with the impression that the stock price is suffering because earnings have been stagnant and mgt has not clearly stated what the dividend will look like when the company splits in July this year. 

The earning from 2003 to 2014 are:


$1.52$0.62$1.52$2.13$2.61$3.16$3.59$2.39$3.88$4.18$3.66$3.56

The purpose of the split is to enable each company to grow faster, hopefully increasing EPS thereby supporting an increasing dividend. Time will tell and I'm in on healthcare for the long run. The population of first world countries is aging and generally, people do not have health active lifestyles.

Number of shares purchased
45
Price per share
$65.20
Commission
$9.95
Total cost per share
$65.42
Total cost
$2,943.95
Annual dividend per share
$2.08
Initial dividend yield
3.18%
Increase in forward 12-month dividends
$93.60

My dividend income is now $8,781 per year.

Thursday, 4 June 2015

Options Trade - BHP Billiton

In November 2014, I sold a put in BBL that expires in a couple weeks. Being in the money, I decided to roll my put down and out. The trades look like this

Bought to Close

May/28/2015 BTC 1 BBL Jun 19 '15 $50 Put @ 5.30 ($11.20 commission)
Nov/18/2014 Sold 1 BBL Jun 19 '15 $50 Put @ 3.00 ($11.20 commission + $0.01 SEC fee)
Profit: -$252.41


Sold Put

Jun/04/2015 Sold 1 BBL Dec 18 '15 $40 Put @ 3.90 ($11.20 commission + $0.01 SEC fee)
Days Held (sell date to expiry): 198
Net Premium: $378.79
Annualized Return = ($378.79 / ($4,000 - $378.79)) * 365/198 = 19.3%

The most likely outcomes of this trade are:

1. Shares are trading above $40.00 at expiration. I will get to keep $378.79 in net premiums.

2. BBL is trading below $40.00 at or before expiration and shares are assigned. I will receive 100 shares of BBL at a net cost of $36.21/share.

Wednesday, 3 June 2015

New Purchase - W. P. Carey

REITs were having a bad day today so I decided to initiate a position in WPC.


Number of shares purchased
39
Price per share
$62.60
Commission
$9.95
Total cost per share
$62.85
Total cost
$2451.26
Annual dividend per share
$3.81
Initial dividend yield
6.06%
Increase in forward 12-month dividends
$148.59

My dividend income is now $8,679 per year.


I've been keeping a close eye on BAX, BBL, HCP, UNP and AXP. I'd really like to buy some UNP and AXP, but am waiting for better prices. Maybe selling puts on these two is the way to go.