Aug/Sept options exp, naked puts in FCX, GM, AFL, T, SDRL, AEM & more

Although it may portend that a significant correction is near (or already underway), the recent increase in market “turbulence” – and higher corresponding VIX level – is actually a welcome change from a put option seller’s perspective. It promises higher option premiums for sellers to collect as well as less-expensive underlying stocks that present more interesting valuation opportunities.

While slightly more of a mixed bag than previous expirations this year (see below), the last couple of monthly options expirations still saw most of my existing naked put option positions expire out of the money resulting in full profits. I did also buy back a couple of naked put option positions early – at pennies on the dollar – that were trading close to the money as expiration approached. But I was assigned one position in a uranium miner, and I did roll out several mostly energy-related naked put positions to avoid assignment in some positions that were deep in the money.

In the meantime, despite a seemingly docile market as presented by the major averages, several sectors and individual stocks have presented interesting put option-selling opportunities and I have initiated (and in some case re-initiated) a number of new positions since my last post (see below). Looking ahead to October I only have three naked put option positions expiring, two of which (both metal mining related) I may be looking to adjust.

Options expiration results:
My August and September-expiring naked put options positions in the following stocks expired out of the money, leaving me with full profits in the positions: Freeport-McMoRan (FCX), Kinder Morgan, Inc. (KMI), Linn Co, LLC (LNCO), Mobile Telesystems (MBT), Rent-A-Center (RCII), Teva Pharmaceutical Industries (TEVA), iShares MSCI Turkey (TUR), and Ventas (VTR).

I was assigned a September-expiring naked put option position in Cameco Corporation (CCJ) and put the underlying shares at a cost basis of ~$19.40. I’m comfortable establishing a small initial long-term position in this uranium miner at these levels and will likely add to the position at lower prices if given the opportunity.

Adjusted positions since my last post include closing out (buying back) naked put positions in Cameco Corporation (CCJ) and Textainer Group Holdings Limited (TGH) for close to full profits, and rolling out existing naked put option positions in Diamond Offshore Drilling (DO), Ensco plc (ESV), General Motors Company (GM), and Transocean Ltd. (RIG).

New positions since my last post include December, January, February, March and April-expiring naked put options in AEGON N.V. (AEG), Agnico Eagle Mines Limited (AEM), AFLAC (AFL), Alexandria Real Estate Equities (ARE), AT&T (T), The Babcock & Wilcox Company (BWC), BioMed Realty Trust (BMR), Cameco Corporation (CCJ), Chicago Bridge & Iron Company (CBI), CoreSite Realty Corporation (COR), Credit Suisse Group AG (CS), CubeSmart (CUBE), Ensco plc (ESV), Goldcorp (GG), Textainer Group Holdings Limited (TGH), Las Vegas Sands (LVS), Mindray Medical International (MR), North Atlantic Drilling Limited (NADL), New York REIT (NYRT), Pan American Silver (PAAS), Rio Tinto (RIO), SeaDrill Limited (SDRL), Suncor Energy (SU), Syngenta (SYT), iShares MSCI Turkey (TUR), UBS AG (UBS), Global X Uranium ETF (URA), Ventas (VTR), and Vanguard Total International Stock ETF (VXUS).

Related Posts:

Comments are closed.