In a PowerOptions WeBlog article, “Hurricanes – Insurance – Options Investing”, we outlined a covered calls stock options strategy for the property & casualty segment of the insurance industry. Using PowerOptions SmartSearchXL stock options search tool, we discovered two attractive covered calls positions. The stock price of both positions dropped after entering the covered calls stock options position, but the positions were still profitable at stock options expiration generating a return of +0.5%, illustrating the beauty of covered calls stock options investing.
In the article, “Sewing Up Profits – Covered Call Investing”, we analyzed the retail fabric market and decided a covered calls stock options strategy was prudent for this segment in light of the popularity of hand made clothing by today’s teens. Two positions were selected for this strategy, and both were profitable returning an average of +2.5%. In article, “Sewing Covered Calls Returns Nice +2.5% in Dec 06”, we again selected retail fabric covered calls positions with options expiration in January of 2007 and the positions generated a nice +2.4% average return.
In a press release dated January 8, 2007, Nexen (NXY) announced a major oil field prospect in the North Sea commenced production. The stock is experiencing heavy trading today at 128% of its average volume. The stock has advanced 3.5% today and over 10% in the last week. Nexen’s stock is approaching the 52-week highs it saw in the spring of 2006.
In an article, “DJIA – Stock Price Resistance”, we outlined a bearish strategy for the Dow Jones Industrial Average when the index is close to its historic high using bear call spreads options. In the article, “DJIA Price Resistance – Another +8.1% Return – Dec. 06”, we noted the continued success of the strategy, and we also selected new positions for January. The January selections were fully profitable returning a very nice +8.1% once again. Since beginning this series on the DJIA at the end of October of 2006, this strategy has returned a very nice +21.1%, in just 3 months!
PowerOptions WeBlog identified several successful trades for the option expiration month of January. Below is a table showing some of the successful trades identified.
Merrill Lynch (MER) experienced higher than expected earnings in the fourth quarter. Earnings increased 68 cents to $2.35 per share. Large equity gains and investment banking results were cited as the main reasons for the increase.
Swiss-based pharmaceutical company Novartis (NVS) reported a 23 percent increase in fourth-quarter profit on Thursday. The company attributes much of the growth to the sales of its top two drugs Diovan and Glivec as well as successes in its generic drug unit.
Netflix (NFLX), a company suffering punishing competition recently from larger rivals such as Apple (AAPL), Amazon (AMZN) and Blockbuster (BBI), will begin showing movies and TV shows over the Internet this week.
K-Swiss (KSWS) was featured prominently last week on Jim Cramer’s Mad Money and on the Motley Fool’s website. Cramer was bearish and the author of the Fool article, Selena Maranjian, was bullish. Who will prove to be right?
Sometimes comical, and always entertaining, stock analyst Jim Cramer answered a question in his mailbag column last Friday afternoon. Today, the PowerOptions’ blog takes a look at Cramer’s comments and offer some option trading suggestions. This blog talked briefly about TiVO’s partnership with Comcast (CMCSA) in the 9 January article, “TiVO Partners for Profits – Covered Call”.