All About Interest

I’ve been out of town since last Wednesday and have a couple of updates.  The first is an options trade on JNJ.  I received notification last Thursday that a limit order on a JNJ put wase filled.

I sold 1 JNJ Oct 20 ’12 $62.50 Put for $2.60.  If these 100 shares get assigned I’ll own 100 shares of JNJ for $59.90 / share before commissions.  I also expect JNJ to raise the dividend that’s payable in June to .60.  This would give me an effective yield on cost of 4%.  Otherwise I’ll collect $260 for waiting. 

Here’s an updated list of my active options:

I decided I wanted some Vodafone (VOD) shares to compliment my shares of Verizon (VZ) in my portfolio but at a cheaper price so I sold puts this morning.  I Sold a Vodafone (VOD) July 21 ’12 Put at $27 for $145 before commissions.  I don’t mind if these get assigned, as it will be the same as if I bought 100 shares for around $25.55/share before commissions.

To me this is a win/win.  I get a stock I want at a cheaper price or I collect $145 to wait 3 months.  

I also closed out the Taiwan Semiconductor (TSM) June 16 Puts for a profit of $154.

Open:


01/23/12 Sold 1 KMI June 16 ’12 $30 Put @ 2.25
03/12/12 Sold 1 AZN Oct 20 ’12 $45 Put @ 3.00
03/28/12 Sold 3 BBVA July ’21 ’12 $7 Puts @ .55
04/09/12 Sold 1 VOD July 21 ’12 $27 Put @ 1.45

Closed Out:

01/19/12 Sold 2 TSM July 21 ’12 $15 Puts @ 1.80
04/09/12 Bought to Close 2 TSM July 21 ’12 $15 Puts @ 1.03
Profit: $154 before brokerage fees


01/03 – Sold 1 RIG $35 May 19 ’12 PUT @ 2.11
03/12 – Bought to Close 1 RIG $35 May 19 ’12 Put @ .09
Profit: $202.00 before brokerage fees 


01/06 Bought 10 SLV Jan 19 ’13 $45 Calls @ 1.05
01/26 – Sold to Close 5 SLV Jan 19 ’13 $45 Calls @ 1.85
02/28 – Sold to Close 5 SLV Jan 19 ’13 $45 Calls @ 2.03
Profit: $890 before brokerage fees

I sold 3 BBVA $7 July 21 ’12 Puts @ .55
Net proceeds (after commission) = $152.73

This is obviously a very speculative play.  The 52-week low/high is 7.02/13.01.  I believe most of the near-term risk is already priced in.  If these get assigned I will get 300 shares for an average cost of $6.49/share.  I already own 105 shares at a cost of $9.48.  Total I’ll have 405 shares at an average cost of  $7.27.

BBVA is a 39 billion market cap company at today’s prices.  They are currently slightly larger than Bank of Montreal.  They have a lot of exposure to Spain.  They have been buying up smaller banks recently and they already own a U.S. bank, Compass Bank, that they paid 9.6 Billion for in 2007.  I banked with Compass for 10 years before being bought and they have always been well run and profitable.  I believe there could be more downside but most of the risk is priced in.  I also believe BBVA will do well in the longterm (5+ years).  

Their dividend payments have been sporadic:

I have a separate smaller options account to suffice for my need to gamble.  I usually sell puts against companies I’d like to own but I do have some speculative plays.  I will try and mention any new trades with this account as well.

I have three options trades that are still open for this year.  I had some GE puts and WM puts expire.  I will mention my purchases since the beginning of the year.  I have three trades still open.

Open:

01/19/12 Sold 2 TSM July 21 ’12 $15 Puts 1.80
01/23/12 Sold 1 KMI June 16 ’12 $30 Put 2.25
03/12/12 Sold 1 AZN Oct 20 ’12 $45 Put 3.00

Closed Out:

01/03 – Sold 1 RIG $35 May 19 ’12 PUT for $2.11
03/12 – Bought to close 1 RIG $35 May 19 ’12 PUT for .09
Profit – $202.00 before brokerage fees

01/06 – Bought 10 SLV Jan 19 ’13 $45 Calls 1.05
01/26 – Sold to close 5 SLV Jan 19’13 $45 Calls 1.85
02/28 – Sold to close 5 SLV Jan 19 ’13 $45 Callas 2.03
Profit – $890 before brokerage fees