Monday, 20 October 2014

Option Expiration - October 2014

This was my most interesting option expiration since I began trading. Fortunately, I managed to keep my margin positive and was able to roll my losing positions to a future expiration for a credit. The amount of income received from rolling my six short put positions (ALA, CPG, CVE, XOM, XOP, and YUM) will be described in my blog post at the end of this month.

My income generating strategy involves mitigating potential losses by buying to close in-the-money short puts; then selling to open puts at a future expiration at the same strike for a credit. I prefer to make these trades on the day of expiration or a few days prior. However, the present market conditions created a few exceptions.

I adjusted two positions (XOM & CVE) to free up margin. I rolled 25 XOM puts to Nov $87.50. I now have 50 XOM $87.59 puts expiring in Nov. I bought to close my 5 CVE $26 puts for $156.24 (a profit of $152.52). Both positions would have expired worthless if I had left them open.

In addition, I rolled my 15 YUM $72.50 puts to April $70. If my margin would have been higher, I would have rolled them to Nov $72.50. This is the third time I have rolled this position.

I also rolled my 5 XOP $61 puts to November $59. I chose the $59 strike because I currently have a Nov $59 position. Consolidating my two XOP positions will enable me to roll them with one trade next month, if necessary.

I rolled CPG, ALA, and CVE to November at the same strike for a credit. These positions would have been assigned if I had left them open.

My 20 Surge Energy (SGY.TO) puts were assigned. I chose not to close the position because I want to own 2,000 additional SGY.TO shares.

The following is a list of my expired option positions. Premiums are the amounts of cash I received after commissions. My option premiums are included as income in my monthly blog posts on the date the income is received.

Date              Position         Premiums

08/15/14  10P  ALA  $48    $327.51
   - rolled to Nov
04/22/14   4C  BTE  $50     $165.01
   - expired worthless
08/13/14   5P  CPG  $42     $268.76
   - rolled to Nov
09/19/14   5P  CPG  $42.    $533.76
   - rolled to Nov
03/12/14   5P  CVE  $26     $308.76
   - closed
08/12/14  10P  CVE $30     $177.51
   - rolled to Nov
03/12/14   5P  ENB  $42     $153.76
   - expired worthless
08/01/14  10P  FTS  $32     $177.51
   - expired worthless
03/12/14   5P  IPL    $27     $358.76
   - expired worthless
03/12/14   3P  KEY  $62     $631.26
   - expired worthless
 03/12/14   3P  PPL   $36      $226.26
   - expired worthless
08/22/14 15P SBUX $67.50  $151.25
   - expired worthless
09/04/14  20P  SGY  $8        $265.01
   - assigned
08/25/14   3C   SU   $46       $103.26
   - expired worthless
03/12/14   3P  TD     $46       $154.26
   - expired worthless
05/20/14   5P  TGT  $52.50   $568.74
   - expired worthless
08/12/14  5P   TGT  $55        $383.75
   - expired worthless
08/19/14  25P  XOM  $90      $783.74
    - rolled to Nov $87.50
10/06/14   5P   XOP   $61       $218.75
   - rolled to Nov $59
09/16/14  15P  YUM  $72.50 $3,586.18
   - rolled to Apr/15 $70

Ticker Symbols

ALA - AltaGas Ltd (TSX)
BTE - Baytex Energy (TSX)
CPG - Crescent Point Energy
CVE - Cenovus Energy (TSX)
ENB - Enbridge Inc (TSX)
FTS - Fortis Inc (TSX)
IPL - Inter Pipeline Inc (TSX)
KEY - Keyera Corp (TSX)
PPL - Pembina Pipelines (TSX)
SBUX - Starbucks
SGY - Surge Energy (TSX)
TD - Toronto Dominion Bank (TSX)
TGT - Target Corp
TRP - TransCanada Corp (TSX)
XOM - Exxon Mobil Corp
YUM - Yum Brands

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