Showing posts with label JNJ. Show all posts
Showing posts with label JNJ. Show all posts
Wednesday, June 20, 2012
Profitable Trade: Johnson & Johnson (JNJ) Naked Puts
Today I closed out the following transaction for a profit:
03/28/2012 STO 2 JNJ Jul 21 2012 62.5 Puts @.95 178.51
06/20/2012 BTC 2 JNJ Jul 21 2012 62.5 Puts @.05 -10.03
We earned $168.48 in 84 days on an average of ~$2400 in margin maintenance. This equates to a 7% return or 30.4% annual. We were able to close out the transaction today with no commission. I now have more powder in the keg for future trades which I feel will present themselves shortly (see WAG and PG).
Saturday, April 21, 2012
Profitable Trade: SLV Naked Puts
Yesterday the following naked puts expired worthless:
04/16/2012 STO 3 SLV April 21 2012 30 Puts @.29 74.71
Silver stayed range bound so these puts expired worthless. We earned 4.3% in 5 days on $1737.13 in margin maintenance. That equates to 313.9% annual. We'll look to put that margin maintenance to work soon. I like the opportunities provided by the recent weakness in JNJ. I'm looking at the 60 puts a few months out.
04/16/2012 STO 3 SLV April 21 2012 30 Puts @.29 74.71
Silver stayed range bound so these puts expired worthless. We earned 4.3% in 5 days on $1737.13 in margin maintenance. That equates to 313.9% annual. We'll look to put that margin maintenance to work soon. I like the opportunities provided by the recent weakness in JNJ. I'm looking at the 60 puts a few months out.
Wednesday, March 28, 2012
New Trade: Johnson & Johnson (JNJ) Naked Puts
Today at the close of the market I entered into the following trade:
03/28/2012 STO 2 JNJ Jul 21 2012 62.5 Puts @.95 178.51
JNJ, one of the bluest of the blue chip Dividend Champions, was trading at just under 65 at the time I entered this trade. If these puts expire worthless we will earn $178.51 in 115 days on ~$2200 of margin maintenance. This equates to an 8.1% return on maintenance or 25.7% annual. JNJ currently yields 3.5% and it's set to hike it's dividend next quarter. If put to me the yield on cost will be around 4%. These puts were written near JNJ's support level. If the stock drops I feel confident I will be able to roll out and down for a net credit. As such, I have an exit strategy in place.
03/28/2012 STO 2 JNJ Jul 21 2012 62.5 Puts @.95 178.51
JNJ, one of the bluest of the blue chip Dividend Champions, was trading at just under 65 at the time I entered this trade. If these puts expire worthless we will earn $178.51 in 115 days on ~$2200 of margin maintenance. This equates to an 8.1% return on maintenance or 25.7% annual. JNJ currently yields 3.5% and it's set to hike it's dividend next quarter. If put to me the yield on cost will be around 4%. These puts were written near JNJ's support level. If the stock drops I feel confident I will be able to roll out and down for a net credit. As such, I have an exit strategy in place.
Monday, March 26, 2012
The End of Fear?
For sure the answer is no...but for now there doesn't seem like there's much fear out there. The risk on trades are happening. Folks are moving money out of bonds and into stocks. We've got money to spend but are patiently waiting for a correction or at least a healthy dose of fear. I'd like to write out of the money puts on Proctor & Gamble and Johnson & Johnson as they will be announcing dividend hikes soon. I also think Pepsico has stabilized and will begin rising to get it's PE more in line with Coca-Cola.
There's a chance the market will keep rising but I definitely won't enter into any trades until we have a day in the red. In the meantime patience is a virtue.
FYI other stocks I'm looking to trade are Altria, AT&T, Chevron, General Dynamics and Microsoft.
There's a chance the market will keep rising but I definitely won't enter into any trades until we have a day in the red. In the meantime patience is a virtue.
FYI other stocks I'm looking to trade are Altria, AT&T, Chevron, General Dynamics and Microsoft.
Thursday, January 19, 2012
New Trade: Johnson and Johnson (JNJ) Naked Puts
Today in a taxable account with JNJ trading at just under 65 I entered into the following transaction:
01/19/2012 STO 4 JNJ Apr 21 2012 60 Puts @.77 294.89
JNJ is obviously a long term hold. It is a dividend aristocrat, dividend champion, blue chip, widow and orphan core holding. If put to us our yield on cost will be over 3.8% with a dividend increase expected shortly after. We could then write covered calls on the position. If the puts expire worthless we will earn 8.73% in 93 days on margin maintenance of $3377.60 which equates to 34.26% annual. Of course we could choose to roll the position, we'll just have to see how things shake out.
01/19/2012 STO 4 JNJ Apr 21 2012 60 Puts @.77 294.89
JNJ is obviously a long term hold. It is a dividend aristocrat, dividend champion, blue chip, widow and orphan core holding. If put to us our yield on cost will be over 3.8% with a dividend increase expected shortly after. We could then write covered calls on the position. If the puts expire worthless we will earn 8.73% in 93 days on margin maintenance of $3377.60 which equates to 34.26% annual. Of course we could choose to roll the position, we'll just have to see how things shake out.
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