BHP trade

Malcolm Myles on

Hi Everyone,

I just closed out a position I wrote for BHP, Billiton Limited. It is a global mining concern based in Australia but with assets in every continent but Antarctica. They have gold mines here in Nevada, iron ore in Auz, oil & gas in Canada, etc. I like the company for many reasons (like the fact its where the Chinese go for iron), and have a small position I wanted to add on to with Options. I'd like to get more shares below $70/share

So...
Nov 14, 12 STO BHP 12/22/12 CSP 70.00 1x @ $2.60, APR 38%, net premium $271.05

Underlying - Cash.
Goal - add on 100 shares at $67+/- per share.
Potential outcome:
Expire worthless, keep money (okay, not great)
Get put to, keep premium, get stock (what I would like to do)
BTC, keep premium, keep money, look for more opportunities (okay, not great)

Stock has followed the bumpy market but today it opened at 72. Put options decrease in price as the stock increases away from the strike price. I really didn't see why I should keep the option on when the price of the stock is gaining and the option is dropping. And...

Nov 29, 12 BTC BHP 12/22/12 CSP 70.00 1x @ $0.68, APR 68%, net premium $197.10

I sold at 2.60 and bought at .68 (sell high, buy low, rinse, repeat). I still want to put on more shares, but I'll wait until I get my price as I still have my cash making 0.25% APR interest. Nice dividend for basically sucking air and exchanging fluids for 15 days!

The Cliff, it looms, bwahahahaha.

Malcolm

ps This works better when I don't play by myself...

Paul Madison on

I am quite impressed. You definitely have learned the COOL_Club Tango.

Similarly I have been making roughly $300 a month just on COH PUTs for the last 5-6 months. I would really like to get it bought under $55 or better yet $52.50 and I still think I will get the opportunity. But in the mean time it is always nice to be paid for waiting. The trick is to not miss the boat when it heads out on a longer trip up.

.25% interest ....really?... that sounds like you have found a great deal!

As always thanks for the post!

Paul Madison

TheCOOLClubDude@gmail.com

www.bivio.com/COOL_Club

On Thu, Nov 29, 2012 at 11:24 AM, Malcolm Myles <malcolm@mmyles.com> wrote:

Hi Everyone,

I just closed out a position I wrote for BHP, Billiton Limited. It is a global mining concern based in Australia but with assets in every continent but Antarctica. They have gold mines here in Nevada, iron ore in Auz, oil & gas in Canada, etc. I like the company for many reasons (like the fact its where the Chinese go for iron), and have a small position I wanted to add on to with Options. I'd like to get more shares below $70/share

So...
Nov 14, 12 STO BHP 12/22/12 CSP 70.00 1x @ $2.60, APR 38%, net premium $271.05

Underlying - Cash.
Goal - add on 100 shares at $67+/- per share.
Potential outcome:
Expire worthless, keep money (okay, not great)
Get put to, keep premium, get stock (what I would like to do)
BTC, keep premium, keep money, look for more opportunities (okay, not great)

Stock has followed the bumpy market but today it opened at 72. Put options decrease in price as the stock increases away from the strike price. I really didn't see why I should keep the option on when the price of the stock is gaining and the option is dropping. And...

Nov 29, 12 BTC BHP 12/22/12 CSP 70.00 1x @ $0.68, APR 68%, net premium $197.10

I sold at 2.60 and bought at .68 (sell high, buy low, rinse, repeat). I still want to put on more shares, but I'll wait until I get my price as I still have my cash making 0.25% APR interest. Nice dividend for basically sucking air and exchanging fluids for 15 days!

The Cliff, it looms, bwahahahaha.

Malcolm

ps This works better when I don't play by myself...

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