Recent Buy

I had a cash position inside my TFSA, and decided to put the cash to work.  It is difficult to find opportunities on the Canadian markets.  The Canadian markets have a lot of energy companies, so I avoided any of these companies due to the low price of barrel of crude oil.

So, on July 27, I purchased 94 units of the HNY, which is the Horizon Natural Gas Yield ETF.  I have owned this ETF recently also.  My brokerage offers commission free ETFs.  So I made 2 trades to collect a total of 94 units at an average price of $15.848 for a total of $1490.07.  There is no commission charged for the buy transaction, but there are ECN fees of $0.33.

This is the Horizon Natural Gas Yield ETF.  The summary of the ETF, as per Yahoo Finance, is described below. 

      The investment seeks to achieve its investment objectives by gaining exposure to a portfolio of securities and other instruments that provide exposure to the price of natural gas futures contracts, or exchange traded funds that are directly or indirectly only exposed to natural gas and/or natural gas options, forwards and futures contracts on natural gas by entering into a forward purchase and sale agreement with the Bank Counter party pursuant to which it will gain exposure to the Natural Gas Portfolio. The Natural Gas Portfolio is comprised primarily of exchange-traded funds, which may or may not be managed by the Manager or its affiliates, that are directly, or indirectly, and only, exposed to natural gas or natural gas futures，and will include natural gas futures, financial swaps and total return swaps - Yahoo Finance

This ETF pays a monthly distribution and the amount of the distribution varies each and every month. July 27 is the ex-dividend date, so I will not receive the distribution payment in about 10 days time.

Disclosure: Long HNY

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

     July 15 was option expiration day for 2 of options that I had on.  One was a short put in Potash Corporation with a $21 strike price.  The second option was a covered call in Royal Bank with a strike price of $80.  The short put in Potash Corporation expired worthless. The covered call option in Royal Bank was assigned.

     As I believe Royal Bank is a well run company, I sold a put option with a $79.00 strike price and expiration date of July 29, 2016.  I collected a premium of $44.05 after commissions.  The duration of this trade is 11 days.

Summary of New Trade

Strike Price:  $79.00
Premium collected after commissions:  $44.05
Days to expiration :  11
Option Assignment Fee : $24.95

Scenario #1  -  Option not assigned 

Return  for 11 days =  $44.05 / $7900
                                = 0.558% 

This return of 0.558% is for ONLY 11 days.  Currently, the interest rate on my high interest savings account is 0.80% per year. 

Annualized Return:  ($44.05 / $7900) *365/11
                               = 18.50%

Scenario #2:   Option Assignment

Adjusted Cost Basis = $7900  - $44.05 +$24.95
                                    = $7880. 90

Current Annual Dividend = $3.24 per share

Yield = $3.24/(7880.90/100)
          = 4.111%
 

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.

Trading Account Update

As previously stated on this blog, that I have started a trading account with a balance below $1000.00.   I started to add $50.00 every two weeks but that has stopped due to a recent job loss.  The following table shows my stats from the start of 2016:

                                # of trades :                 18
                               Total Capital added:    $250.00
                               Trading Acct Balance:  $ 1989.88
                               Average Drawdown:   $28.31
                               Average Loss:             $35.18
                               Average Accuracy:     88.89%
                               Average Risk:              $33.36
                               Average Reward:         $63.47
                               Average R/R :             1: 1.902

     
       I have been trading penny stocks, stocks, REITS and options.  Any dividends that will be received from this account with stay within the account.

Note:  The trades are listed under the Trading Tab above with all the trades listed as of July 10, 2016

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.