Tuesday, March 15, 2016

Recent Activity

   I have not wrote in a while.  I bought back my call option in QSR and then sold the 100 shares.  I ended up doing a mistake in my account by clicking on sell inside of buy to cover the 100 shares and ended up with 2 contracts instead of one.  I owned only 100 shares so this would make the second contract a naked call. So the 2 contracts were averaged out and bought to close. I then sold my 100 shares of QSR on their own.
   I recently wrote a covered call in TD bank with a strike price of $56.00 and an expiration date of Apr 15.  The activity on the options exchange in Canada is very low, so it makes it difficult to trade options on most stocks.  As I am not with Interactive Brokers, my commission is rather high making in more difficult to trade options in this manner.
    I recently sold 3 cover call contracts in the etf XDV.  The premium, without commissions, was $0.75 per contract.  The option is April 15 2016 with a strike price of $21.00.  Right now the call option is in the money.  If the price of the stock remains above $21.00, my 300 units of the ETF will be called away.  I will come out with a small profit not including the distributions that were collected while holding the units over the past several months.
      On Mar 15, there was some weakness in the stock price of QSR again.  So I sold a Apr 15 2015 $48 put option for a premium of $64.05 including commissions.  If the price of QSR stock stays above the strike price I get to keep the premium and do not own the stock.  If the price of QSR falls below the strike price, I may be assigned the option.  If assigned, I will have a reduced cost basis for the stock.  Selling a put option allows an investor to get paid while waiting for the price of the stock to go down.
     QSR is a very volatile stock although the underlying businesses that make up the company, Restaurant Brands International, are Burger King and Tim Hortons.  Up here in Canada, Tim Hortons is a staple as 8 out of every 10 cups of coffee are served by Tim Hortons.  Burger King is not very busy up here in Canada for some reason.  There is a lot more McDonalds then Burger King here in Canada.  Some parts of Canada are in a recession or starting to go to a recession, people still want their coffee. 

Disclosure:  Long TD, QSR and XDV

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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