Long Call Position in Barrick Gold
December 17, 2020
Bullish Outlook

Long Call Position in Barrick Gold

Back in August, the investing world was stunned when legendary investor Warren Buffett revealed that he had purchased shares in Barrick Gold (symbol ABX).  Up until then, Warren had been considered a “gold skeptic”.  In his 2011 letter to shareholders, Buffett wrote the following: The second major category of investments...

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1 month ago
Protective Put in Toronto Dominion Bank
December 14, 2020
Concepts

Protective Put in Toronto Dominion Bank

Canadian investors love bank stocks. And why not? They have been terrific investments throughout the years. Take a company like Toronto Dominion Bank (symbol TD).  It pays a dividend of $0.79 per quarter and had an indicated yield of 4.53% at the time of writing this article. In our current environment of rock-bottom interest...

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1 month ago
Covered Call on West Fraser Timber
November 20, 2020
Other

Covered Call on West Fraser Timber

There is nothing more Canadian than lumber stocks.  On the institutional desks, traders often refer to them as trading the “trees.”  And no stock is more iconic than West Fraser Timber (symbol WFT). During the March COVID panic, the price of West Fraser fell more than 65%, from a high of $65.11 to a low of $21.60. Chart...

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2 months ago
Considering a Long Call Position in Air Canada
November 16, 2020
Bullish Outlook

Considering a Long Call Position in Air Canada

The COVID crisis has been especially hard on airline stocks. The stock price of Canada’s largest airline, Air Canada, collapsed from over $50 in January to $10 in March.  Although the stock has recovered somewhat since then, when compared to other equities the bounce has been anemic. Chart 1: Air Canada (symbol AC) over past...

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2 months ago
Filling the Gap with a Long Call Spread
October 09, 2020
Bullish Outlook

Filling the Gap with a Long Call Spread

During the COVID crisis the stock market declined, but energy stocks were particularly hard hit as the price of oil plunged to levels never before seen.  During the panic selling, one of Canada’s largest energy companies, Suncor Energy (ticker SU) left a gap from $33.52 to $30.19. (A down gap is where the price opens on the...

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4 months ago
Cash-Secured Put Writing on the iShares S&P/TSX Capped Energy ETF
October 05, 2020
Bullish Outlook

Cash-Secured Put Writing on the iShares S&P/TSX Capped Energy ETF

Although the broad Canadian stock market index has almost recovered to its pre-COVID crisis high, there is one sector that has lagged badly.  The energy sector has not recovered to anywhere near the levels seen in early 2020. Chart 1: iShares S&P/TSX Capped Energy ETF (symbol XEG) 2019-2020 Source: Bloomberg For those who...

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4 months ago
Long Straddle with Cineplex
September 11, 2020
Trading Idea

Long Straddle with Cineplex

Before the corona crisis hit, Cineplex was scheduled to be taken over by UK-based Cineworld Group in a $1.65 billion transaction. Cineworld was going to pay $34 per Cineplex share. However, the closing of the Canadian economy due to the coronavirus crisis led Cineworld to claim that there had been a material adverse change...

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5 months ago
Bear Call Spread in the XIU Market
September 09, 2020
Bearish Outlook

Bear Call Spread in the XIU Market

The stock market has rallied a long way from the March lows. The iShares S&P/TSX Equity 60 ETF (symbol XIU) is up almost $8 from that scary day on March 23, 2020 when the market reached bottom. The rally has been steady, with few pullbacks. However, it is completely natural to expect that, eventually, there will be a...

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5 months ago
Stock Repair Strategy Using Options
July 30, 2020
Bearish Outlook

Stock Repair Strategy Using Options

The coronavirus crisis seemed to come out of nowhere. It caught retail and professional investors off guard equally. Almost overnight many stocks fell by more than 25%, and although some have managed to recoup their losses over the past few months, many have not. What is an investor to do in such an environment? One could...

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6 months ago
Harvesting Premium By Shorting Out-of-the-money Calls
July 30, 2020
Bearish Outlook

Harvesting Premium By Shorting Out-of-the-money Calls

Have you ever been in the fortunate position of holding a stock that had rallied a long way, but you were concerned it had gone too far too fast, yet you did not want to sell your position? Or, have you ever thought that the market would go sideways for a while, and you did not expect your stocks to rally? Maybe you have seen...

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6 months ago
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