Did some repositioning of stocks ahead of Friday options expiry replacing some stocks and switching others. Banked profits in one Swiss Bank made up for losses in another.
Portfolio News
In a week where S&P 500 rose 1.4% to touch another all time high, my pension portfolio rose only 0.35%.
Big movers of the week were all smallish moves in Australian stocks - Pilbara Minerals (PLS.AX) (+12%), Cobalt Blue (COB.AX) (+12%), Castillo Copper (CCZ.AX) (+12%) Nvidia (NVDA) popped 10% after announcing results.
Biggest sector drag in the portfolio were Canadian marijuana stocks all down around 12%. Biggest individual faller was Maxeon Solar (MAXN) after announcing a $125 million capital raising at $18 a share - price 23% dropped to that level.
https://finance.yahoo.com/news/maxeon-solar-technologies-announces-public-210300911.html
Navios Maritime (NM) also gave back a lot of recent gains dropping 14%
Crypto booms
Bitcoin price pushed 8% higher finishing the week pretty much where it started
Biggest mover in my portfolios was Chainlink (LINKUSD) with a 38% move up finishing 18% higher on the week. Nice to have topped up the week before.
It was a week for altcoins with EOS, BNB, XRP all pushing up in the mid 30 percent range before settling back
Bought
Electricité de France S.A. (EDF.PA): French Utility. Price has moved up above my covered call sold strike. On a down day I bought a half holding at 1.6% premium to possible assigned price. Sold covered call for May expiry for 4.7% premium and 6.6% coverage. In another portfolio I did the same thing in Friday trade at a price just below sold strike - as it happens price dropped just below assigned price, so I get to keep the stock. Dividend yield 1.91%
Star Peak Energy Transition Corp (STPK): US Energy SPAC. Replaced stock sold last week at 8.8% lower price than that exit. Sold an April covered call for 0.94% premium and 8.9% coverage. Jim Cramer had added this to the Action Alerts Plus bullpen but has not bought - I feel a need to have one SPAC in the account to test the water out.
Invesco Solar ETF (TAN): Solar Power. Solar stocks have been hammered after being bid up in the euphoric dreamland flowing from Joe Biden promises on renewable energy. Price has dropped to the same level at the time of the US Election. I think the glory days will return but it is hard to pick individual winners and losers. I constructed a call spread risk reversal buying a January 2023 90/125 bull call spread for a net premium of $9.60. This offers a maximum profit potential on its own of 264% for a 50% move in price. I funded the premium fully by selling a January 2022 strike 80 put option - this is only 4% price protection (it was more at trade time).
Let's look at the chart which shows the bought call (90) as a blue ray and the sold call (125) as a red ray and the sold put (80) as a dotted red ray with the expiry dates the dotted green lines on the right margin. I picked 90 strike for the bought call as price was trading above 85 at trade time. I chose 125 as the sold call strike as that is the range for the last price move upwards. The sold put level is below the recent consolidation zone. The dotted blue line shows the effective price of entry if I get exercised above 90 but price has not gone over the sold call level ($125)
Barrick Gold Corporation (GOLD): Gold Mining. My holding in Van Eck Vectors Gold Mining ETF (GDX) will be assigned in Friday's expiries. I saw a trade idea for Junior Gold Miners ETF (GDXJ) and tested its price relative to GDX - basically the two ETF's have tracked each other since the August 2020 highs - so I added a few more tickers to the comparison chart - GDX are the bars and GDXJ is the yellow line.
I noted that Barrick Gold (blue line) was lagging and decided to switch from GDX to Barrick - dividend yield at 1.64% is higher. I added Yamana Gold (AUY - purple line) to the chart at the time of writing this (after trade time). It too is lagging - I do have positions in Yamana already.
I wrote a covered call for May expiry at 1.47% premium with 7.1% coverage.
In another portfolio I made some replacement trades ahead of options expiry
Cronos Group Inc (CRON): Canadian Marijuana. I will be exercised on a strike 9 naked put in Friday expires - I bought an equivalent size parcel at $8.00 to average down entry price. Wrote a covered call for May expiry at 3.25% premium with 12.5% coverage.
Wells Fargo & Company (WFC): US Bank. With price opening above $42.50 sold call strike, I bought a replacement parcel at 0.7% premium to likely assigned price. Wrote a covered call for May expiry at 1.5% premium with 5.1% coverage. I also sold a naked put for May expiry at 1.23% premium with 7% protection
Walmart Inc (WMT): US Retail. With price opening above $140 sold call strike, I bought a replacement parcel at 0.06% premium to likely assigned price. Wrote a covered call for May expiry at 1.2% premium with 3.5% coverage.
Sold
UBS Group AG (UBSG.SW): Swiss Bank. With price closing at SFr14.64 rolled up a December 2021 strike 14 call option to December 2022 strike 15. This locks in a 93% blended profit since January/February 2019 and February 2020. The replacement position size is smaller than the sold position released some capital.
Cryptocurrency
Litecoin (LTCBTC): Price has run up 44% since March 2021 lows - sold a one third portion for 19% profit since February 2021.
Aave Coin (AAVEBTC): Switched proceeds from sale of Litecoin into AAVE as price looks like it is turning over.
Income Trades
Friday was options expiry day - there were quite a few assignments - I will report those early next week. I did write a few contracts for May expiry this week
Covered Calls
Covered calls written (Europe 2, US 3, UK 1)
Naked Puts
Tesla, Inc (TSLA): US Automotive. With price closing at $738.85 I took early action to sell a May expiry 600 strike put option for a 1.9% premium. Price would have to drop 23% to go to exercise.
Honeywell International Inc (HON): US Industrials. With price opening at $228 sold a May expiry strike 210 naked put for a 0.65% premium with 8.5% price protection. Some of the brokers upped the target price which made me comfortable selling a naked put a bit higher than previously. Jim Cramer remains positive on this as a cyclical industrial play.
Currency Trades
No trades
Cautions: This is not financial advice. You need to consider your own financial position and take your own advice before you follow any of my ideas
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April 12 - 16, 2021
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