Tuesday, September 30, 2014

Recent Option trades - Part 1

In my recent sale of Tim Horton shares that I owned, I decided to receive some cash flow from the market. This cash flow is via option premiums which is another way to receive cash flow in the financial markets.

On September 25th, I sold a put option in Toronto Dominion (TD) for $0.82 per contract. The strike price is $56.00 and the option expires Oct 18, 2014.  When you sell a put option, you receive payment immediately in the form of option premium. The premium is the money you receive for being obligated to purchase 100 shares of TD on or before October 18, 2014 if the option is exercised. The buyer of the put option has the right but not the obligation to sell 100 shares of TD before or on Oct 18, 2014.  The net option premium is $71.05 after commissions.

On September 29,  I sold a put option in Roger's Communications Class B stock  (RCI.B) with an Oct 18, 2014 expiration date.  I was paid a premium of  $70.00 excluding commissions.  The strike price is $42.00. I currently own 100 shares of RCI.B and if this option is exercised than my ACB will be reduced. The net option premium received was $59.05.

Disclosure : Long TD, RCI.B


     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

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