the lencurrie life » LYG

First TimAlert trade review – GROW

lencurrie — Mon, 20 Jul 2009 18:57:21 +0000

*I’m posting this a lot later than when I wanted to, almost a month in fact.. however judging by GROW’s current price of $11.83, I’m glad I sold when I did last month.. heh heh. I have not tried another TimAlert trade since this one.

Well as you know from my first TimAlert trade, and subsequent missing of the exit of Tim, I had held onto my ‘GROW’ short a lot longer then what was likely a good idea.

I’m writing this post a few days weeks after I’ve closed my position. In fact, I’m sort of kicking myself cuz as usual, the day after I close my position, the stock moved rather large in the direction I wanted it to. It doesn’t really matter to me, I was right in my assumption that it was still a bad chart and it was going to move down again anyhow, this is actually not a PennyStock to Tim’s standards, so I knew if I held on, it would tank eventually.

I closed my position at 8.22 on the 19th of July, after watching it bounce of the 8.00 mark a few times (see chart below.. the cross hair is where I sold).

So as you can see, I did exit it at the proper time that day… almost nailing the low of the day actually. However if I had just waited until Monday, I would have realized a lot more gains in that it plummeted to 7.80 and below the next day. Oh well… left some on the table. A win is a win, and I’ll take it. 0.48 x 35 = $16.80.. yep.. a big winner indeed.. however wait a minute, I only invested $300… so a 5.5% gain… hey, that’s not laughable.

Mind you, I’m more interested in my buy/write of LYG which is working out pretty well so far… the 2 options I sold for $1.80 are now worth only $1.10 (0.75 for the call, and 0.35 for the put) at the moment, and dropping as time goes on… unfortunately the stock has dropped as well to 4.51, which, from my $5.90 entry price, is a good 23% decline… having said that, 11.3% was today.. BUT the big news is that it announced a huge dividend of $0.8477a share for people holding stock before June 23rd.. and who was? I WAS!! so that’s another $84.77 which I will be paid on the 30th of June (according to SEC filing).

Nice.

LYG Buy/Write Strategy – Final Update & Profit/Loss Scenario

lencurrie — Mon, 20 Jul 2009 14:22:55 +0000

Well, some interesting things happened since my last post of LYG.

It ends up, I DID in fact get the dividend (they must have been mistaken) of .8477 per share.. so since I owned 100 shares.. that was $84.77 which I was paid out in a special dividend. SWEET!

However, that dividend somehow adjusted the options which I sold as well.. so as it turned out.. they expired on Friday and even thought the stock was trading at 4.68 I believe at that time.. my shares were called away, and the put expired worthless.

End of story, I made $90 on the trade in total after commissions. Which, from a starting point of $380, represents a 31% profit. I’ll take it! (Especially since the stock was down 1.22 from my buy point of 5.90 which would have been a $122 loss had I kept just the stock and not sold the options).

SOOOO.. I’ve done it again.

I’ve purchased DRYS at 6.00 and sold the $5 SEPT put/call at 0.40 and 1.34 respectively. Giving me a cost of $426 today (plus commissions of $20 total).

As I write this I’m down $9.50 on the trade, which is starting out just like the last one.. but I’m really liking my entry price of this stock which I’ve liked for a long time. I will sit on this trade for some time and see what transpires.

LYG – Buy/Write Strategy Update

lencurrie — Mon, 06 Jul 2009 14:01:32 +0000

Well since I purchased the buy/write strategy on June 2nd here I’ve watched as it’s dropped pretty from $5.90 a share, down to $4.40 a share… about 25%. So to say I was wrong about the direction is certainly an understatement.

However, thanks to the power of options, instead of being down $150.. I am only down 4%, or $24. WOW!

And as time goes on.. it’s eating away the premiums on the options I sold (not bought), so that $180 is now down to around $57.5. And dropping, which for me is a great thing… unfortunately for me, they announced a special dividend.. of $.84 a share, which would have been another $84 for me, however the date of record was 05/21.. so I missed it by 2 weeks (purchased my shares on June 2nd).

Anyhow, no big deal.. I may get a very good entry price on 200 shares as I posted in my original..

If on the other hand the shares go below $5 to say, $4 (over 47% drop) … then I will have to buy 100 more shares at $5.00.. which means that I’ll have paid $910 for 200 shares.. or $4.55 a share on average… which I don’t mind paying.. in fact I would likely do the same thing again and see if I can’t get more shares come July expiration.

So as of this writing, the shares are at $4.40 each.. with the market still looking sickly downward.. so I may get the 100 put to me and have to buy more in 2 weeks time.. but I’m going to just wait and see what happens.

Bottom line I guess is that this stock has gone down 25% since I purchased it.. an oddity for sure.. however since I’ve sold a few options. My risk is limited, and I’m still in a great position to make money on this stock. I can’t wait to do the same for DRYS which is a stock I’m going to keep as well.

Just posted my first buy/write strategy purchase – LYG.

lencurrie — Tue, 02 Jun 2009 15:27:20 +0000

Well.. as I posted a few days ago on how to purchase a stock for 15 – 20% off the current market price, I have done just that with a stock which I believe is going to go up and I’d like to be a part of it.

LYG

So as you can see, this stock has been beaten up pretty good over the last year.. but more importantly they used to have a dividend of $2 a share on a yearly basis (when the stock was at $20). So if they look to put that back in.. well, that will boost the stock for sure! However I don’t see that happening this year.. we’ll see.

Now they have since cut that dividend to nothing.. so as you can expect, the price of the stock has dropped to it’s low of just over 2.22 or so during march. Pretty good rebound since then, and I expect more.

Now I have just purchased 100 shares at $5.90, I have concurrently sold the July 09 $5 call and a put option for 1.35 and .45 respectively. So I’ve banked $1.80 per share.. my price of the stock is now $4.10 per share.

If the stock stays around where it is now or above $5 for that matter in July, I will have my shares called away and have a profit of $1.80 a share or $180. Off of the $590 purchase price that’s just over 30% profit in 2 months. I’ll take it.

If on the other hand the shares go below $5 to say, $4 (over 47% drop) … then I will have to buy 100 more shares at $5.00.. which means that I’ll have paid $910 for 200 shares.. or $4.55 a share on average… which I don’t mind paying.. in fact I would likely do the same thing again and see if I can’t get more shares come July expiration.

Truth be told I’m looking at just getting my 30% profit and moving on. We’ll see how it goes.

In the meantime.. waiting for a good pennystock to try to short with TimAlerts