A busy week replacing stocks assigned the week before and a tough week in markets as investors get spooked by rising yields.
Spent a few days away over the weekend - a shorter report but a full slate of trades.
Portfolio News
In a week where S&P 500 dropped 2.5%, my pension portfolio dropped only 0.6% with moves in marijuana and energy (mostly uranium) helping.
The news of the week was a spike in US yields which spooked technology investors especially.
It took some calming words from Federal Reserve head Jerome Powell - the Fed will keep doing what is needed he said.
No big movers report this week as I did not update prices on the weekend.
Crypto booms
Crypto boom became a bit of a bust with Bitcoin finishing the week 17% lower having been as low as 22% lower.
Boom of the week in my holdings was Cardano (ADA) ending the week up 25%.
Bought
Danone S.A. (BN.PA): French Consumer Products. Ran stock picking screens to find some European stocks to replace those assigned last week. This was the only one I found on price to sales screen - their management problems are pressuring stock value.
Banco BPM Società per Azioni (BAMI.MI): Italian Bank. Replaced stock assigned last week at 7% premium to assigned price. I did run price relative between Italian, French and Dutch banks assigned last week - Italian banks still lagging so they got the nod to be replaced.
Unicredito Italiano (UCG.MI): Italian Bank. Topped up holding to be able to write covered calls.
Enel SpA (ENEL.MI): Italian Utility. One of the big themes for the next few years will be renewable energy. I was reading about progress Total (FP.PA) is making in migrating from a pure oil producer. That got me onto looking at Enel which has the largest renewables footprint in Europe. Dividend yield 4.18%
Navios Maritime Holdings Inc (NM): Oil Shipping. Replaced a portion of stock assigned last week. Premium available for strike 10 options was super attractive at 8.25% for 37% price coverage.
Canadian Solar (CSIQ): Solar Power. Solar stocks have had a sharp sell off after the pump and dump action last week. I was expecting all solar holdings to be assigned - none were. A 10% pullback in Monday trade looked to good to give up.
PepsiCo, Inc (PEP): US Consumer Beverages. Used a down day to top up my holding to be able to write covered calls. Covered call written at 0.4% with 5% coverage.
Tilray, Inc (TLRY): Canadian Marijuana. Marijuana stocks also down on the day following last week's pump and dump. A 10% drop on the day was too good to pass up.
Wells Fargo & Co (WFC): US Bank. Replaced half holding assigned last week at 1% lower price than assigned at. Two days later, with rotation out of Goldman Sachs I replaced the other half this time at 1.8% premium to assigned price.
Ford Motor Company (F): US Automotive. Replaced portion of holding assigned last week at 3.7% premium to assigned price.
L&G Hydrogen Economy Ucits ETF (HTWO.SW): Alternative Energy. Clean energy is coming to the top of the cooker so to speak. Hydrogen will be an important part of the future. I saw an email from my Swiss funds site talking about a new ETF launched by Legal & General. Add in, Jim Cramer just added Linde plc (LIN) to the buy list partly to invest in their hydrogen plans. I added a small holding of the ETF using the Switzerland listing to hedge the US Dollar exposure.
Advanced Micro Devices, Inc (AMD): US Semiconductors. Added to my holdings in two portfolios to average down entry price. Jim Cramer idea was to switch out of Broadcom (AVGO) to AMD - in this portfolio I did that.
PayPal Holdings, Inc (PYPL): Payment Services. Averaged down my entry price by doubling position size - still less than 100 shares holding.
JinkoSolar Holding Co (JKS): Solar Power. Used a down day on Feb 25 to add to my holding. I fully expect solar to recover the selloff handsomely and covered call premiums are great at 6.5% with 10% coverage. I chose to write this covered call at only 10% to grab that premium as I have 2 others further out.
Linde plc (LIN): Speciality Chemicals. Round up holding on a down day to get to 100 shares to be able to write covered calls. More exposure to hydrogen - see HTWO above.
Nordic American Tankers Limited (NAT): Oil Shipping. Averaged down my entry price on a down day. Forward dividend yield is a scary 13.5% - going to need oil to start moving again to keep that up.
Aurora Cannabis Inc (ACB.TO): Canadian Marijuana. Doubled position to average entry price down on a down day.
Sold
Broadcom Inc (AVGO): US Semiconductors. Jim Cramer idea to switch to AMD. Locked in 73% profit since March 2020. Original trade idea came from Jim Cramer. The chart shows the value of not panicking when a market falls over.
My trade was opened the week before the crash of March 2020 - price dropped 43% from my entry and then rebounded 203% to Feb 24 closing price.
Goldman Sachs (GS): US Bank. Jim Cramer trimmed the holding in Action Alerts Plus portfolio. I chose to close my holding for 75% blended profit since September/October 2020. Funds were redeployed into Wells Fargo (WFC)
Shorts
Invesco QQQ Trust (QQQ): Nasdaq Index. Markets have become very nervous about inflation expectations which are pushing yields up. Tech sector is being sold down because of indebtedness concerns. Put in place a hedge trade in personal portfolio. With price around $324, bought a 306/292 ratio put spread for a just cash neutral trade. This gives downward price protection of between 5.8% and 11% from the closing level of $324.13 on Feb 24.
Cryptocurrency
Ethereum (ETHAUD): Watched the ETHBTC price chart bottom out and converted Australian Dollars for Ether on Feb 24.
The break up was the first day in 5 days that price made a higher high - it proved to be a head fake with 5 more days of selling.
Income Trades
Covered Calls
A busy week of writing covered calls - 35 in US, 1 in Canada, 20 in Europe, 2 in Switzerland and 4 in UK. Average premiums are well in excess of 1%. This is proving to be a rock solid strategy generating enough cash each month to pay all my bills.
Naked Puts
14 naked puts written in US and 2 in Europe. Mostly these are income trades but a few are pre-entry trades on stocks that make it to a buy list (Nucor (NUE), Pepsico (PEP), Tesla (TSLA), Linde (LIN), Johnson & Johnson (JNJ)). I find this a useful way to participate in a stock espeically those with high tocket preices too large to buy 100 shares to write covered calls. Tesla is a classic example - with a Feb 22 close of $714.50, I wrote a naked put with 590 strike for a 1% premium. Price has to drop 21% to reach the sold strike. I do have margin inthe account to allow the purchase of 100 shares.
Nucor Corporation (NUE): US Steel. Jim Cramer added this to the bullpen. I sold a strike 58 naked put for 1.03% premium on closing price of $63.03 with 8.7% protection
Currency Trades
Bought a new trading system based on a webinar presentation which did not try to oversell stuff. Just quiet focus on what the system does. First trade was a swing trade on AUDNZD. First trade was a winner - doing better than breaking even since then on a few trades. I will factor this into a regular working routine.
Cautions: This is not financial advice. You need to consider your own financial position and take your own advice before you follow any of my ideas
Images: I own the rights to use and edit the Buy Sell image. News headlines come from Google Search. All other images are created using my various trading and charting platforms. They are all my own work
Tickers: I monitor my portfolios using Yahoo Finance. The ticker symbols used are Yahoo Finance tickers
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February 22 - 26, 2021