In article, “Canadian Investing Eh? – Covered Calls”, we considered investing in Canadian covered calls stock options positions. The selected positions returned an average of 2.1%, in only 23 days. Fourteen of the seventeen positions were profitable, and nine of the seventeen positions were fully profitable.
The biggest loser of the selections was NRMX with a return of -13.5%, but the loss was not nearly as large as if the position had been a straight long position, which would have returned a very ugly -23.8%. Neurochem’s (NRMX) stock slipped after the FDA extended an action date for one of the company’s potential pharmaceuticals. Investing in biotechnology companies is one of the more risky investment strategies available.
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We searched for Canadian covered calls stock options for May of 2007 and the results are shown below.
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| Stock Sym |
Stock Price |
Option Sym |
Expire &Strike |
Opt Bid |
%Dnsd. Prot |
%If Unch. |
%If Asgnd. |
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| BCE | 34.80 (-0.32) | BCEEG | 07 MAY 35.0 (23) | 0.70 | 2.0 | 2.1 | 2.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BVF | 24.61 (-0.29) | BVFEE | 07 MAY 25.0 (23) | 0.55 | 2.2 | 2.3 | 3.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CNQ | 59.61 (-0.81) | CNQEL | 07 MAY 60.0 (23) | 1.50 | 2.5 | 2.6 | 3.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COGN | 42.41 (+0.11) | CRQEV | 07 MAY 42.5 (23) | 1.00 | 2.4 | 2.4 | 2.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| KRY | 3.95 (+0.01) | KRYEA | 07 MAY 5.0 (23) | 0.15 | 3.8 | 3.9 | 31.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GRS | 17.03 (-0.44) | GRSEW | 07 MAY 17.5 (23) | 0.40 | 2.3 | 2.4 | 5.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GG | 24.60 (-0.77) | GGEE | 07 MAY 25.0 (23) | 0.65 | 2.6 | 2.7 | 4.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TAP | 94.49 (+0.68) | TAPES | 07 MAY 95.0 (23) | 2.20 | 2.3 | 2.4 | 2.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NRMX | 13.85 (+0.24) | KQMEC | 07 MAY 15.0 (23) | 0.90 | 6.5 | 6.9 | 15.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NAK | 11.74 (-0.26) | NAKEV | 07 MAY 12.5 (23) | 0.30 | 2.6 | 2.6 | 9.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NTO | 4.60 (-0.05) | NTOEA | 07 MAY 5.0 (23) | 0.10 | 2.2 | 2.2 | 11.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NG | 14.67 (-0.46) | NGEC | 07 MAY 15.0 (23) | 0.45 | 3.1 | 3.2 | 5.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTEX | 23.29 (-0.15) | QFTEE | 07 MAY 25.0 (23) | 0.60 | 2.6 | 2.6 | 10.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPMR | 9.25 (-0.07) | OQGEB | 07 MAY 10.0 (23) | 0.20 | 2.2 | 2.2 | 10.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PAAS | 29.55 (-0.88) | USPEF | 07 MAY 30.0 (23) | 0.90 | 3.0 | 3.1 | 4.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| POT | 187.38 (-0.51) | PVZER | 07 MAY 190.0 (23) | 5.60 | 3.0 | 3.1 | 4.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SWIR | 17.25 (-0.31) | IYQEW | 07 MAY 17.5 (23) | 0.70 | 4.1 | 4.2 | 5.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TLM | 19.29 (-0.24) | TLMED | 07 MAY 20.0 (23) | 0.40 | 2.1 | 2.1 | 5.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| URZ | 6.60 (-0.32) | URZEU | 07 MAY 7.5 (23) | 0.15 | 2.3 | 2.3 | 16.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The majority of the positions found were new faces this month: BCE, BVF, CNQ, TAP, NAK, NTO, NG, OTEX, OPMR, SWIR, TLM and URZ.
The highest potential return is for KRY with a % if assigned potential return of 31.5%. To achieve the 31.5% return, the stock price for KRY must increase to or above the $5 strike price for the covered calls stock option.
Our ugly friend from last month, NRMX, has the highest downside potential with 6.5% and a maximum potential return of 15.8% To achieve the maximum potential return, the stock price of NRMX must increase to or above the $15 strike price of the call option. The NRMX position also has the highest % if unchanged potential return of 6.9%.
Competitors:
Competitors for BCE include: Rogers Communications Inc. (RG), TELUS Corporation (TU), and MTS Allstream Inc. (private).
Competitors for BVF include: Eli Lilly & Co. (LLY), Teva Pharmaceutical Industries Ltd. (TEVA), Watson Pharmaceuticals Inc. (WPI), Alkermes Inc. (ALKS), King Pharmaceuticals Inc. (KG), and Penwest Pharma. Co. (PPCO).
Competitors for CNQ include: EnCana Corp. (ECA), Petro-Canada (PCZ), and Suncor Energy Inc. (SU).
Competitors for COGN include: Business Objects SA (BOBJ), Oracle Corp. (ORCL), Actuate Corp. (ACTU), Hyperion Solutions Corp. (HYSL), and Microstrategy Inc. (MSTR).
Competitors for KRY include: AngloGold Ashanti Ltd. (AU), Barrick Gold Corp. (ABX), and Newmont Mining Corp. (NEM).
Competitors for GRS include: Apollo Gold Corp. (AGT), and Kimber Resources Inc. (KBX).
Competitors for GG include: AngloGold Ashanti Ltd. (AU), Barrick Gold Corp. (ABX), Newmont Mining Corp. (NEM), and Kinross Gold Corp. (KGC).
Competitors for TAP include: Anheuser-Busch Companies Inc. (BUD), and InBev NV/SA (private).
Competitors for NRMX include: QLT Inc. (QLTI), and Patheon Inc. (private).
Competitors for NAK include: Coeur d’Alene Mines Corp. (CDE), Hecla Mining Co. (HL), and Fairbanks Gold Mining, Inc. (private).
Competitors for NTO include: Barrick Gold Corp. (ABX), and Coeur d’Alene Mines Corp. (CDE).
Competitors for NG include: Barrick Gold Corp. (ABX), and Fairbanks Gold Mining, Inc. (private).
Competitors for OTEX include: EMC Corp. (EMC), International Business Machines Corp. (IBM), Microsoft Corp. (MSFT), and Interwoven Inc. (IWOV).
Competitors for PAAS include: Compania de Minas Buenaventura SA (BVN), BHP Billiton (private), Hecla Mining Co. (HL), and Apex Silver Mines Ltd. (SIL).
Competitors for POT include: BASF AG (BF), Mosaic Co. (MOS), Yara International ASA (private), Agrium Inc. (AGU), and Terra Indus. Inc. (TRA).
Competitors for SWIR include: Novatel Wireless Inc. (NVTL), Kyocera Wireless Corp. (private), and Sony Ericsson Mobile Communications AB (private).
Competitors for TLM include: EnCana Corp. (ECA), Cairn Energy PLC (private), Dana Petroleum plc (private), and GeoGlobal Resources Inc. (GGR).
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[tags] Canadian, MTS Allstream Inc., InBev NV/SA, Patheon Inc., Fairbanks Gold Mining, Inc., BHP Billiton, Yara International ASA, Kyocera Wireless Corp., Sony Ericsson Mobile Communications AB, Cairn Energy PLC, Dana Petroleum plc, ABX, Barrick Gold Corp., ACTU, Actuate Corp., AGU, Agrium Inc., ALKS, Alkermes Inc., AU, Anglogold Ashanti Ltd., BOBJ, Business Objects SA, BUD, Anheuser-Busch Companies Inc., BVN, Compania de Minas Buenaventura SA, CDE, Coeur dAlene Mines Corp., ECA, EnCana Corp., EMC, EMC Corp., GGR, GeoGlobal Resources Inc., HL, Hecla Mining Co., IBM, Intl. Business Machines, IWOV, Interwoven Inc., KG, King Pharmaceuticals Inc., KGC, Kinross Gold Corp., LLY, Lilly (Eli) and Co., MOS, Mosaic Co., MSFT, Microsoft Corp., MSTR, Microstrategy Inc., NEM, Newmount Mining Corp., NRMX, Neurochem Inc., NVTL, Novatel Wireless Inc., ORCL, Oracle Corp., PCZ, Petro-Canada, PPCO, Penwest Pharma. Co., QLTI, QLT Inc., RG, Rogers Comms. Inc., SIL, Apex Silver Mines Ltd., SU, Suncor Energy Inc., TEVA, Teva Pharma. Indus. Ltd., TRA, Terra Indus. Inc., WPI, Watson Pharma. Inc., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]