Concepts
Long Call Position in Barrick Gold
Patrick Ceresna
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...
Protective Put in Toronto Dominion Bank
Patrick Ceresna
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...
December – Educational Events
Montréal Exchange
December 3, 2020 Webinar – Selling Synthetic Puts Time : 1:00 p.m. (ET) Speaker: Richard Ho and Chris Thom Language: English Where: Online More information here. December 7, 2020 Webinar – Monthly Market Outlook Time : 12:00 p.m. (ET) Speaker: Tony Zhang Language: English Where: Online More information here....
Writing covered calls — some points to consider
Martin Noël
Before implementing a covered call writing strategy, investors need to consider several factors in order to make an informed decision. This final article in a series of four articles on covered call writing will discuss the choice of a strike price for a call option as a compromise between the desired level of protection and...
Let’s do some exercise: Exercising your options
Richard Ho
In this article, we’ll talk about exercising call options and why investors would want to do so. Read the article to find out the pros and cons of exercising a call option. You discover a pharmaceutical company that trades at $100 a share and has a COVID-19 vaccine in phase 3 clinical testing. It’s extremely promising, but...
Writing covered call options to generate more income
Martin Noël
With interest rates currently at all-time lows, finding ways to generate income in our security portfolios is a challenge. However, the strategy of writing covered call options (WCCO), whether applied systematically or on an ad hoc basis, allows us to generate additional income through the premiums received. This is the third...
Selling your securities by writing covered call options
Martin Noël
Let us say you are willing to sell some securities in your portfolio, or you are considering it. Adopting the covered call writing strategy is like getting paid for making a commitment to sell the securities. This is the second in a series of four articles on covered call writing. It discusses how to use this strategy as an...
Writing covered call options: an introduction
Martin Noël
Perhaps you would like to start using options, but you do not know which strategy to implement. The simplest and most popular strategy among individual and institutional investors is covered call writing. This article is the first in a series of four articles on covered call writing. It covers the basic features of this...
Using USX options to hedge U.S. dollar risk
Martin Noël
With interest rates at historic lows, it is unlikely that the Bank of Canada will decide to raise the policy rate anytime soon. But we live in a world that is full of surprises, and things can change quickly. Events with the most unexpected repercussions can and do occur (the current pandemic comes to mind). Who really knows...
Butterfly on Shopify
Patrick Ceresna
Recently the Royal Bank of Canada lost its title as our country’s most valuable company in terms of market capitalization. For two brief weeks, Shopify sat at the top of the heap. Chart 1: Royal Bank vs. Shopify May 31, 2020 Source: Bloomberg SHOP’s run has been a sight to behold. Chart 2: Shopify...
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