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.