Stock Investment » CSX

Stocks Investments :Options Expiration – August 2011

admin — Sat, 03 Sep 2011 12:59:52 +0000

Not that it’s a surprise to anyone, but this is not a good options expiration Friday for my account. All of my naked puts finished in the money and all of my covered calls finished out of the money. These are the 11 options I was short going into the day. CSX – 1 August [...]

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Not that it’s a surprise to anyone, but this is not a good options expiration Friday for my account. All of my naked puts finished in the money and all of my covered calls finished out of the money.

These are the 11 options I was short going into the day.

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Stock Market Investment :New Naked Puts on QCOM and CSX

admin — Mon, 04 Jul 2011 13:01:12 +0000

I’ve mentioned a couple of times recently that I was considering QCOM as one of my next trades. I finally got around to it today. While QCOM was trading at .27 I sold one QCOM August .50 naked put for .80 and received 9.64 after commissions. I only sold one

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I’ve mentioned a couple of times recently that I was considering QCOM as one of my next trades. I finally got around to it today. While QCOM was trading at .27 I sold one QCOM August .50 naked put for .80 and received 9.64 after commissions. I only sold one contract to start with and if assigned will be comfortable selling a strangle for another put and covered call if assigned and then would be closer to a full position. I don’t actually expect this put to be assigned though. QCOM has shown good support around .00 a few times this year and I expect it to hold again. If doesn’t hold I’ll be surprised if breaks after that. marks the low for the year on a short pop lower in March. I expect any moves below .50 (if we get another one) will be short lived and will just be another buying opportunity on QCOM. QCOM even pays a dividend of almost 1.6% which should give it somewhat of a floor at some point during a slide.

Like QCOM, I’ve sold options on CSX in the past too and think the risk/reward for coming back to it favors selling puts again. CSX stock split 3 for 1 a week and a half ago and makes it an easy stock to take a small position on and stay patient in riding it out. While CSX was trading at .97 I sold one CSX August naked put for .15 and received 4.64 after commissions. With CSX being less than half the price of QCOM I have plenty of cushion for it to fall some, assign 100 shares, sell a strangle and then even do the same one more time before I reach a full position in CSX. That said, I see the downside risk for CSX as fairly limited. .00 has been very solid support for months and I see no reason that should change in the near term. If breaks support then is right below it and should be the next level of support before buyers return CSX to higher levels. I’m not overly optimistic for CSX to take off much higher though. .00+- looks like a tough area for resistance. This trading channel makes CSX a great candidate to sell puts on. If it can stay in this channel for another eight weeks I’ll be ready to repeat the order. CSX’s dividend yield is slightly more than 1.9% and will help provide some support if CSX drops beyond my expected floor.

Next up on my hit list might be another put on UWM. I charted the Russell 2000 Index yesterday and with today’s continued strength I am much more comfortable adding some more exposure. I might go as near term as October. We’ll see what kind of trade I can get to hit. August might end up a better play. It won’t be today, but see this week as highly likely to make the trade.

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Stocks Investment :Sold CSX Naked Put for March

admin — Wed, 23 Feb 2011 13:36:38 +0000

CSX is one of the stocks I’ve worked with a few times in the past year and I got drawn back to it again today. I might be a little early on pulling the trigger (actually I’m quite late in returning to it overall), but I don’t think the downside risk is too great if [...]

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CSX is one of the stocks I’ve worked with a few times in the past year and I got drawn back to it again today. I might be a little early on pulling the trigger (actually I’m quite late in returning to it overall), but I don’t think the downside risk is too great if my new timing is off. I’ve been keeping my eye on CSX ever since I got out the last time when my put expired worthless in January. I thought it might correct more back then, but instead it kept running higher and is + higher now than it was then. Instead of continuing my wait and extending my regret I decided to take a chance after I saw CSX break above its trend line of higher highs and then add a confirmation day today above it.

While CSX was trading at .41 this morning I sold one CSX March .50 naked put for .30 and received 9.61 after commissions. It’s a small potential profit, but it’s also less than five weeks out. I went out of the money to give myself a cushion of 4.3% on a dip. If assigned, my cost per share will be .21 which is around the current level for the trend line of higher lows that started a couple of months ago. The longer trend line of higher lows from almost six months ago is almost up to .00. A dip and support down there would be great for me. I’d either take an assignment and sell a covered call or would be able to sell a new put again close to the same strike. I don’t see CSX falling below .00 based on the chart and feel comfortable even owning it down there based on its fundamentals.

CSX has a 1.5% dividend yield and a forward P/E ratio of only 12.83. Its PEG ratio is under 1.0 at 0.84 which gives some room not to be perfect with its forecasting. CSX has a beta of 1.30, so if we get a broader market correction I could get spanked quickly. I’m expecting the fundamentals to protect the downside from too far of a fall though. I would’ve preferred to wait for the April contracts to sell a new put, but after missing so much of the recent run up I didn’t want to wait any longer. I can always roll this one out farther if the April contracts look that much better or can just wait this out and go for a May contract after this one expires. This is my only March option contract, so it’s good to have something expiring then anyway. I’ve focused so much on longer term ETFs that I’ve neglected my short game. I’m trying to get over that now. We’ll see if I can be better about spreading my contracts out than I have been recently.

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Stock Market Investment :Sold CSX Naked Put

admin — Fri, 26 Nov 2010 02:58:03 +0000

I hate to miss out on selling volatility on days like today that have good spikes in fear so I went shopping this morning for some new positions. I entered limit orders for new naked puts on UCO, DVY, EEM and ITRI in case we get another leg lower in the next week or so. I have alerts [...]

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I hate to miss out on selling volatility on days like today that have good spikes in fear so I went shopping this morning for some new positions. I entered limit orders for new naked puts on UCO, DVY, EEM and ITRI in case we get another leg lower in the next week or so. I have alerts set up on a number of other stocks to remind me to check them out if they hit key levels too. When I saw CSX down more than 2.5% on the day I checked the chart and the options and saw what I think is a good opportunity.

While CSX was trading at .17 I sold one CSX January .50 naked put for .70 and received 9.31 after commissions. That gives me a 7.25% cushion before this turns into a losing trade. CSX has a forward dividend yield of 1.7% which isn’t massive, but helps offer some support in the event of a deeper fall. Its forward P/E ratio is only 12.80 which is in the lower half of its historical range and in line or cheaper than its major competitors.

Even though I’m bullish on CSX for the longer term I won’t be surprised if it dips a little deeper before turning around. That’s why I only sold one call to start with today. I didn’t want to miss out if the markets decided to do an about face and move higher before the close and also didn’t want to overextend myself if it follows the path its chart says is possible. First of all, CSX is still holding support from its intraday low last week. I have no reason to say that support is going to break, but if it does, CSX could head back down to .00 where it gapped up to on October 11th and then used that range as support two days later. That’s also close to the 50 day moving average. Based on that logic I could’ve gone with the strike, but I saw the Fibonacci 61.8% retracement level at .59 and the 50% level at .47 and thought more downside was possible to reach these marks. I had already pegged the .00 range as likely strong support and with a possible 17%+ annualized gain from this strike I didn’t feel I needed to risk any higher dollar assignments. That’d just be greedy.

If CSX drops another couple of dollars and I see it starting to find its footing I plan to sell another naked put. If I change my mind and take an assignment on just 100 shares I’ll be set up to write an options strangle on CSX with a new naked put at a lower strike and a covered call at a higher strike. If CSX reverses and heads higher soon I might close this put and roll it higher, add another put at a higher strike in addition to this one or just leave it alone and move more of my account onto potential margin by doubling up elsewhere.

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Stock Investments :Options Expiration – October 2010

admin — Sat, 23 Oct 2010 09:41:54 +0000

I only have a few options expiring today with mixed results. The rest of my portfolio is weighted to November’s expiration. If nothing drastic happens in the next few trading days, I’ll start working towards building up my options for December’s expiration and

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I only have a few options expiring today with mixed results. The rest of my portfolio is weighted to November’s expiration. If nothing drastic happens in the next few trading days, I’ll start working towards building up my options for December’s expiration and move deeper into potential margin, all the while hoping that any correction is swift and causes the VIX (and VXX) to spike. On the other hand, a slow correction will give me time to chase my positions with new option legs. The way I see it (maybe with rose colored glasses) I’m in a good position right now to profit in either direction.

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Stock Investments :Options Expiration – August 2010

admin — Mon, 23 Aug 2010 03:43:30 +0000

Today’s option expiration finished somewhat differently than I thought it was going to as of a week ago. Here’s the breakdown of how it went down:

VXX, two August 24 Puts – I’ll be assigned 200 shares of VXX on Monday morning. Instead of trying to roll

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Today’s option expiration finished somewhat differently than I thought it was going to as of a week ago. Here’s the breakdown of how it went down:

I have a lot of options expiring in September, so any other new options I write in the coming weeks will probably be for October so I can continue to spread out my risk into different expiries.

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Stock Investment :Options Expiration – May 2010

admin — Sat, 22 May 2010 12:28:10 +0000

What started just a couple of weeks ago as an easy ride into expiration turned around on me very quickly, especially in the last few days before today’s relief. I’m still not sure what to think with where the markets are heading over the next week/month and so I started

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What started just a couple of weeks ago as an easy ride into expiration turned around on me very quickly, especially in the last few days before today’s relief. I’m still not sure what to think with where the markets are heading over the next week/month and so I started adjusting some of my positions today to remove some risk.

Based on how the underlying stocks moved after my trades today it looks like I might have picked the wrong ones to exit as soon as I did, but that’s how it works. Not every trade can be profitable and made at the right time. I’m moving on with minimal realized losses for now and live to trade another day. I’ll probably sell a few more covered calls on Monday or maybe even another naked put or two if we appear to be heading higher again.

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Stocks Investment :Sold CSX May Naked Puts

admin — Wed, 21 Apr 2010 12:14:20 +0000

I’m finally back to my desk physically and probably 40% mentally. My vertebrae surgery was a success (or so we think so far), but I had complications the following week and had to go back into the hospital for two extra nights due to some serious swallowing problems. Without

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I’m finally back to my desk physically and probably 40% mentally. My vertebrae surgery was a success (or so we think so far), but I had complications the following week and had to go back into the hospital for two extra nights due to some serious swallowing problems. Without going into much of the details on it, I’m still on a liquid diet, have lost a lot of weight, still medicated and under rested. I’m not stating all of this for pity, but to explain my absence and why my posts might seem more stream of conscious than usual.

Anyway, the good stuff – I’ve been watching the markets as much as possible and have been growing increasingly more bullish even after already getting fully invested recently. After INTC and CSX did so well with earnings yesterday I knew I wanted to get in deeper. I still have INTC naked puts that look destined to finish out of the money, so I turned my attention to CSX. I got stuck in a meeting at 9:30 and couldn’t get my trade in right at the market’s open, so I entered a limit order and waited for a dip. By a couple of minutes after 10:00 am, while CSX was trading at .38 I sold two CSX May .50 naked puts at .05 each and received 8.57 after commissions.

I see potential technical support around .50 which makes this seem like a fairly safe trade for me. Along with the technical view, I like the strong fundamental picture CSX is painting from their earnings call. The 1.8% dividend yield is another nice piece of the puzzle. CSX’s P/E ratio is lower than its competitors’ average which also added to why I went with it versus another rail-based transportation services company.

By selling the naked put out of the money I am giving myself more than a 5% cushion before this position turns break even. I was tempted to sell the strike, but continue to wonder if we’re starting to get fully priced in for where the market should be. I think we have more room to run, but since I’m already fully invested I don’t have to take large risks. Little nibbles will get me to where I need to be with less risk.

While I was in the hospital last week I missed my three year blog anniversary. I started this blog after my initial vertebrae surgery and now it’s lead to a career change for me as an Investment Advisor. I never would’ve guessed I’d have made a move like that, but it’s been fun growing. Thanks to all of you who continue to come back to these pages, read and provide feedback. I’ve learned a lot from many of you as I hope you have from me.

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