US markets drop hard on corona virus fears following what had been flowing in world markets already. The bubble pops. This update is action around Friday option expiries in one portfolio. Update on other portfolios next update
Portfolio News
Market Selloff
When the selloff came it came hard with all indices down more than 3%. Of note is futures are pointing to a Tuesday recovery = maybe oversold.
My hedging trades done in advance of options expiry looking smart right now. I could see this shaping up and did the renewal trades before the others had expired - I do not normally do that.
Bought
Fireeye (FEYE): Cybersecurity. Exercised on a naked put at $16 vs closing price of $15.49. Naked puts written for $0.53 gives a breakeven of $15.47
Huntington Bancshares Inc (HBAN): US Regional Bank. Exercised on a naked put at $14 vs closing price of $13.91. Naked puts written for $0.26 gives a breakeven of $13.74
Sold
BNP Paribas (BNP.PA): French Bank. Assigned on covered call for 2.5% profit since November 2019. Income from covered calls added another 2.22%
Commerzbank (CBK.DE): German Bank. Assigned on covered call. One tranche bought in December 2019 makes profit of 7.4%. The other tranche makes a blended loss of 25%. I have been writing covered calls on this holding since June 2016 and overall income return has been 39.8% = more than enough to cover capital loss. I did make a few buy backs along the way. I have replaced the stock assigned (see TIB509)
Deutsche Bank AG (DBK.DE): German Bank. Assigned on covered call for a blended loss of 28% since July/August 2016. I have been writing covered calls on this holding since June 2016 and overall income return has been 19.6% = not quite enough to cover the capital loss. I did make a few buy backs along the way. I have replaced the stock assigned (see TIB509)
ENGIE SA (ENGI.PA): French Utility. Assigned on covered call for a profit of 2.4% for 4 weeks. Income form covered calls and naked puts added another 1.2%. I will replace this stock and keep writing.
Allegheny Technologies Inc (ATI): Speciality Metals. Assigned on covered call for a loss of 25% since February 2018. This trade was placed on the back of steel and aluminium tariffs designed to help US manufacturers. That did not work out though price did move more than 10% in the month after the trade deal was signed. Income dragged back 0.93%.
Yamana Gold (AUY): Gold Mining. Assigned on covered call for a blended profit of 26% since February/October 2018. Income from covered calls added another 4%
3D Systems Corp (DDD): 3D Printing. Assigned on covered call for a blended loss of 5% since May 2018/January 2019 . Income from covered calls and naked puts dragged back 5% = a breakeven trade
JinkoSolar Holding Co (JKS): Solar Power. Assigned on covered call for a blended profit of 18% since June/September 2019. Income from covered calls added another 5.2%. I retain a holding of stock.
Sunrun Inc (RUN): Solar Power. Assigned on covered call for a profit of 10.8% over 4 weeks. Income from covered calls added another 1.52%
This tells me solar is a strong sector to get back into.
Expiring Options
Fifth Third Bancorp (FITB): US Regional Bank. With price closing at $29.40 strike 31 call option expired - rolled up trade from last month. I chose not to roll out to August in this portfolio as I had done in others. Naked put written on this stock did claw back some of the loss.
Income Trades
10 covered calls assigned. 7 out of 9 naked puts expired. Will update new covered calls - was not able to watch market close this morning.
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
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February 21, 2020