I mentioned a limit order that was filled yesterday with BBVA. I had a second limit order filled yesterday but didn’t have time to talk about it until today.
I believe NSC is on a lot of watch lists right now. It hit a 52-week low yesterday of $60.96/share. It has a 52-week trading range of $60.96-$78.50. They reported weaker than expected earnings yesterday due mainly to weak coal exports. They also said that weaker coal exports will carry into 2013. I believe this to be a short-term problem and I think the company is a great long-term investment here.
Yesterday I sold 1 Jan 19 ’13 $60 Put for $2.10. If executed I would own another 100 shares of NSC for $57.90/share not counting commissions. This is a yield of nearly 3.5% on a stock that has historically had a high dividend growth rate. If the put expires I would keep the $210 minus commissions.
I’ve already made a couple of purchases this year for NSC and I also sold a longer dated put that expires next March. If these options contracts get assigned then NSC would easily be my largest holding. That is not a big concern as I plan on aggressively building my DG portfolio next year.
I’ve now capped out my options portfolio and will probably be writing another article as an overall options update. I don’t want to keep more cash than 15% of my total DG portfolio in this options account. As it stands, I have to keep 9k in my options account per margin requirements. This is right at the 15% threshold. My options trades will likely be very limited through the rest of the year.