Sunday, January 27, 2013

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) BHP Billiton Ltd (NYSE: BHP) - Our Jan '14 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 5/7/12.

2) Blackstone Group LP (NYSE: BX) - Our Jun '13 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 12/26/12.

Option Strategies - Partial Collars

3) Coach Inc (NYSE: COH) - We bought Coach shares and protected them with Feb '13 $50 puts. We can sell calls, to complete the collar, at any time before expiration.

Coach was down 16+% this week, presenting us with a good entry point. Also, volatility was at a 5-year low, so tacking on put protection was inexpensive. We think Coach will bounce back, but we're protected if it deteriorates. Also, as volatility creeps back into the market, which inevitably it will, we can sell calls, which will pay for the puts and possibly more, making it a zero-risk trade.

The reward-to-risk profile of the investment analysis is as follows.

Bought shares @ -$50.81
Bought $50 puts @ -$1.09
Total debit @ -$51.90

Maximum reward = Unlimited share price appreciation above $51.90, plus quarterly dividends
Maximum loss (risk) = $50 -$51.90 = -$1.90

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, January 20, 2013

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Du Pont (NYSE: DD) - Our Jan '14 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 5/17/12.

Option Strategies - Collars

2) Oracle Corp (Nasdaq: ORCL) - We sold our Oracle collars on 1/14/13 @ $31.98 for a 1.0% gain. (A collar is a combination of shares, calls, and puts. Purchasing puts protects against losses. Selling calls helps pay for the puts, but limits profits. It "collars" the gains and losses.)

Return calculation = ($31.98 sale price - $31.65 buy price) / $31.65 buy price x 100% = 1.0%.

The date we opened the trade was 11/23/11.

Option Strategies - Partial Collars

3) Bank of America Corp (NYSE: BAC) - We bought Bank of America shares and protected them with Jan '14 $17 puts. We can sell calls, to complete the collar, at any time before expiration.

The reward-to-risk profile of the investment analysis is as follows.

Bought shares @ -$11.30
Bought $17 puts @ -$5.93
Total debit @ -$17.23

Maximum reward = Unlimited share price appreciation above $17.23, plus quarterly dividends
Maximum loss (risk) = $17 -$17.23 = -$0.23

Adding to our thesis... Meredith Whitney, head of Meredith Whitney Advisory Group LLC, says shares of Bank of America Merrill Lynch will climb to $15 in the next six to nine months. (Source: Bloomberg)

Short Strategies

4) We sold short additional shares of the United States Natural Gas Fund LP (NYSE: UNG) on 1/16 @ $19.24.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending January 18, 2013.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, January 13, 2013

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Covered Calls

1) Infinera Corp (Nasdaq: INFN) - We sold Jan '14 $10.00 calls.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending January 11, 2013.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, January 6, 2013

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) United States Steel Corp (NYSE: X) - Our Jan '13 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 7/14/11.

Long Stocks

2) Knight Capital Group Inc (NYSE: KCG) - We sold our shares of Knight Capital Group Inc (NYSE: KCG) on 1/2/13 @ $3.51 for a 11.8% gain.

Return calculation = ($3.51 sale price - $3.14 buy price) / $3.14 buy price x 100% = 11.8%.

The date we opened the trade was 8/6/12.

Option Strategies - Collars

3) Bank of America Corp (NYSE: BAC) - We sold our Bank of America collars on 1/4/13 @ $11.16 for a 9.1% gain. (A collar is a combination of shares, calls, and puts. Purchasing puts protects against losses. Selling calls helps pay for the puts, but limits profits. It "collars" the gains and losses.)

Return calculation = ($11.16 sale price - $10.23 buy price) / $10.23 buy price x 100% = 9.1%.

The date we opened the trade was 11/23/11.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending January 4, 2013.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio