Recent Trade

During the past couple of months, a stock that I trade from time to time decreased in value. Over the last 3 months the stock hit a high on May 8th and closed at $3.10 per share. The stock has fallen dramatically since May 8, and is currently trading at $2.10 a share. There continues to be weakness in the commodities and investors have ongoing concerns about Greece.

Sherritt is a mining company that is headquartered in Canada. They have mining operations in Canada, Cuba and Madagascar. A major issue with the company was the possible strike action of union workers at their Madagascar operations.

The two main trade unions at Sherritt International Corp's Ambatovy nickel mine in Madagascar will not call a new strike over job layoffs for now and are still seeking dialogue, union officials said on Friday.  (source: Reuters ).

On Jun 25, 2015, I purchased 350 shares of Sherritt International Corporation ( ticker symbol S.TO) at $2.12 a share for a total cost of  $747.12 including commissions. This trade is in my margin account.  This entry point is the lowest entry point for me when it comes to purchasing shares of Sherritt International corporation.

Sherritt International is scheduled to pay a dividend on July 14, and the ex-dividend date is June 26. So I am eligible to receive this dividend as I purchased my shares on June 25.

The stock is down approximately 26% since Nov 25, 2014.  This stock position is a trade, and therefore will not be holding for the long term.

DISCLAIMER
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.

Option Trade Update - Part #2

This post is a follow up to my post, Option Trades Update - Part #1 for Jun 21, 2015.

     My put option in Rogers Communications Class B stock was assigned. I checked my broker account last night the option was not assigned. I work up this morning and checked my brokerage account and the option was assigned.  I was expecting the assignment to show up this morning first thing as the last time an option was assigned to me, I found out Monday night.

     I owned 100 shares of Rogers Communications Class B stock since June 2014 when a put option was assigned with a $44.00 strike price, which you can read about here. My average cost base as a result of the first option assignment was $4366.90.

     This new option assignment had a $42.00 strike price.

Summary of Latest Trade

Investment : 100 shares * $42.00 = $4200
Option premium including commissions : $27-$10.95 = $16.05
Assignment fee : $24.95
Current annual dividend : $1.92 / share

Total Cost = $4200- $16.05- $24.95
                  = $4208.90

Yield = 1.92 /(4208.90/100)
          = 4.56%

Conclusion:

     With this latest put option assignment, I now own 200 shares of RCI.B.

number of shares = 200
Total cost  = $4366.90 +$4208.90 = $8575.80

ACB/share = $8575.80 /200 =$42.88

Yield = $1.92 / $42.88
          = 4.478%

    Although the premium received after commissions was less than the option assignment fee, the overall cost basis is reduced on my overall position.  This purchase adds $192.00 to my annual dividend income based on the current annual dividend.  RCI.B is scheduled to pay a dividend in early July, so these 100 shares will not be eligible for the dividend as the record date as now passed.  My initial purchase in 2014 in which I missed the July dividend payment of 2014 as well.

I will update my investing portfolio spreadsheet in early July to reflect this new purchase.

Disclosure : Long RCI.B

DISCLAIMER
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.

Option Trades Update - Part #1

     On May 13, I sold a put option in Telus Corporation that trades in Canada. The put option had 06/19/2015 for expiration and the strike price was $40.00.  The option was not assigned as the price of the stock remained above the strike price including at expiration.  You can read about the selling of the put option here, which is the option trade #1 in the link.

  Recap:   Premium collected after commissions : $35.05
                Return on Capital : 4.420%
                Return on Capital Annualized : 43.6%
                Days to Expiration : 37

We can also calculate the return:

Return =  premium collected / (cost of investment - option premium collected)
Return = $35.05 /($4000-$35.05)
Return = 0.884%

Return annualized = Return/37*365
Return annualized = 8.286%

       The second option trade was selling a put option in Rogers Communications Class B stock at a strike price of $42.00.  The price of the stock was trading lower on the day of the expiration and remained below the strike price the entire day of Jun 19, 2015.  For my broker, usually the option stays in the account until Monday evening, as that is the day the trade is updated. But the put position does not show in my account and the balance as not been changed. According to my brokerage account, the stock last traded at $41.83.  So will have to wait until Monday evening to find out if the option was assigned.

For disclosure, I own 100 shares of RCI.B prior to making this trade. 

To be continued in Part #2.

Disclosure: Long RCI.B

DISCLAIMER
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.
    
 

Recent Purchase

    Due to being home from work today, as work week was reduced to 4 days per week for entire staff at my company, I logged into my brokerage account at the market opening.  The price of the Canadian stocks are delayed by 15 minutes but I can get a snap quote for any particular stock.

    I was looking to average down on my Canadian National Railway position inside my TFSA. I  initiated a position on May 4, 2015 which you can read about here.   For this new purchase, I placed a limit order for $72.64 which was lower the the current snap quote of the CNR share price by about $0.20 per share.  The order was filled immediately as there was a lot of transactions at the market opening.

    The stock is down approximately 20% ytd. The share priced reached at high of $88.89 on February 19. This purchase was at $72.64.  That is an 18.28 percent decrease from the high back in February. Why the fall in price so much?  The governments of Canada and the United States have brought in tougher rules for railways in which they will have to meet such as safer railway cars. There have been a lot of railway derailments over the last few years which involved hazardous chemicals and crude oil. The price of barrel of crude oil has also dropped a lot since last September, when it was around $92.00 a barrel. Canadian National Railway serves 3 coasts in North America. These coasts are west coast of Canada, East Coast of Canada, and Gulf of Mexico.

Click to Enlarge

       I purchased 13 shares at $72.64 for a total cost of $949.32 including commissions. The yield on this transaction is 1.712%.  This recent purchase adds $16.25 to my annual dividend income.

I liked the stock at $79.75, which is my initial purchase price, and like it even more at what is currently trading at.  The stock has fallen trading lower than my purchase price earlier this morning, but I can not time the market and know for sure what is going to happen on the right side of the chart.

I  will update my investment tab in earlier July with this purchase.

Disclosure: Long CNR


DISCLAIMER
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.

Dividend Update May 2015

      The month of May is another month of dividend income landing in my accounts. This money is used to help pay my expenses if it is needed. If the money is not needed, it is ALL used to purchase new investments to further increase my cash flow.

       The price of a barrel of crude oil is still the major focus of the markets and the economy. Depending on where you live, the degree of the negative effect of low oil prices depends on how many people work in this industry. Right now oil is trading near $58.00 a barrel for July 15 contract. My portfolio is not immune to the low oil prices as Enerplus is trading around between $11.00 and $13.00 for the past while. Enerplus is an oil and gas producer with major assets in Western Canada and some sections of the states.

 Non-registered Account

• Emera (EMA)  - $40.00
• Enerplus (ERF)  -$ 26.25
• Killam Properties (KMP)  - $5.75
• Royal Bank  (RY) - $77.00
• Shaw Communications (SJR.B)    - $19.75

TFSA

• Boston Pizza  Royalties Fund (BPF.UN)   - $25.34
• Claymore 1-5 yr Laddered Corporate Bond (ETF) - $0.91
• Cominar REIT (CUF.UN ) - $5.39 
• Dream Office REIT   (D.UN)  - $ 16.61
• Killam Properties (KMP) - $  14.60 

Total = $231.60

     This total represents a 20.85% decrease from 3 months ago and 8.43% increase  year over year.  The 3 month decrease was so large because TD Bank dividend was deposited into my account  in April whereas it was deposited into my account in February.   Although its dividend payment date was January, that payment date fell on a weekend. In some cases the day a week will affect the payment being deposited. So the payment is missing from this May's dividend total due to being paid in April.  Also, the monthly dividend from Enerplus was cut from $0.09 per share to $0.05 per share.  The positive note of this month was higher dividend payments in 4 of the stocks listed above via dividend increases. 
 
    The last month I sold  put options.  When an individual sells options they receive a premium upfront. The individual gets paid this premium and keeps it regardless if the market goes up, down or sideways.  I sold a put option in Telus Corporation with a expiry date of Jun 19, 2015 for a premium of $35.05 including commissions.
 
    I also received another distribution payment of $56.00 for my swing trade in Dream Office REIT in my non-registered account. This is not listed above since it is a trade, so I keep the money in the account and do not pay myself first with this payment. I have received $1267.47 in distributions so far on this trade.

     I will update my dividend income tab with the new amount. It is great to see money from passive income sources deposited into my brokerage account every single month.

Disclosure : Long all securities above.

Photo Credit: www.mipaq,co.za

DISCLAIMER
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.

Portfolio Update - May 2015

  The month of May is now behind us. The major news continues to be the price of a barrel of crude oil and the effect it has on the economy. On May 5, 2015 the province of Alberta also held a provincial election. The government changed hands for the first time in 44 years. The businesses in the energy sector who do business in the province of Alberta are concerned on the New Democratic Party (NDP) will do in terms of royalties. 
   
     During the month of May , I made a few long term investments and a few trades. My first investment was a purchase in Canadian National Railway on the Toronto Stock exchange. Canadian National Railway is said to be the best run railroad in North America and they go serve 3 coasts. These coasts are east and west coasts of Canada and the Gulf of Mexico.
 
     I then invested in another company, Restaurant Brands International.  Restaurant Brands International consists of two major brands, which are Burger King and Tim Hortons. I have owned Tim Hortons in the past and sold the stock a few months after announcing that Burger King want to buy them. Towards the middle of the month, I sold these shares as there was some upward momentum in the share price and there is not much history on the new company.
 
    I then entered into two options trades. One of these trades was selling a put option in Telus Corporation. Telus Corporation trades on the both the TSX and the NYSE.  The other option trade was buying a call option in CNR.  The call option in CNR was to try to take advantage of an upswing in the share price due to not having enough capital in account to make a purchase. On May 15, I exited the call option in CNR for a small profit.

    I made a second option trade involving CNR on the 20th of May and sold to close the call option on May 25. The profit was very small, which you can read about here.

    On May 26, I re-enter into a position in Restaurant Brands International. The entry price was lower than early this month and plus 10 mores shares this time around.

     On June 1, I sold a put option in Roger's Communications Class B stock (RCI.B) with a $42.00 strike price. I currently own 100 shares of RCI.B at a higher price.  The expiry date on this option is June 19, 2015.

  I did acquire more shares through DRIPs.

  Shares added due to drip

2 shares of ERF @ $13.00 for a total of $26.00
1 share of KMP @ $10.67 for a total of $10.67

  As of  June 2, 2015, the value of my portfolio stands at $80159.81. This is an decrease of 2.198 % over last month. I will update my investing account tab above


Disclosure: Long KMP, ERF,QSR, CNR, RCI.B

DISCLAIMER

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 be NOT 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

Option Trade

I currently own 100 shares of Rogers Communications Class B  (RCI.B) at $43.69 a share in my margin account.  I have owned this stock since last summer.

Today I sold a put option in RCI.B with a June 19, 2015 expiration date.  The strike price is $42.00 and expiration is in 18 days.

Summary:

Premium : $0.27*100-$10.95 = $16.05
Days to expiration : 18

Scenario #1:  Option not assigned

Return  = $16.05/$4200
             = 0.38%

Annualized Return = $16.05/$4200*(1/18)*365
                                 = 7.749%

When selling options, the option seller gets to keep the premium regardless if stock goes up, down or sideways.

Scenario #2: Option Assigned

Option Assignment Fee = $24.95

Adjusted Cost Base = 4200-premium received+option assignment fee
                                 = $4200 - $16.05 + $24.95
                                 = $4208.90

This is higher than strike price a bit. Why would I do that? Why wouldn't I just put in a limit order at $42.00 a share for 100 shares?  I entered in $0.25 limit price to sell the option apparently by accident. As soon as clicked sell and within 3 seconds the option was filled at $0.27. I didn't have time to modify the order.  I will pay even more attention before I click "send order"  the second time than I normally would. This is the first time I did this that I can recall as I am usually very careful when putting in orders. In my brokerage, you click on buy or sell and submit order by clicking on "send order".  Then an order confirmation comes up and you get to review your order and two options are "send order" or "cancel".

If this option gets assigned it will reduce my overall cost basis, so my mistake will still benefit me a lot.  

Disclosure: Long RCI.B

DISCLAIMER:
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.