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A Synthetic Long Stock Strategy For Canadian Banks
Jason Ayres
Canadian bank stocks have been somewhat unfavorable this year. Concerns about the Canadian economy, the impact of low oil prices and the pressure on lending margins from lower interest rates have had many investors questioning just how much more upside can be expected. The chart below is a snap shot of the weekly price action...
Playing the Weak Loonie
Richard Croft
The Canadian dollar has fallen on hard times. The Canadian dollar tends to follow West Texas Crude so it’s not surprising to see our Loonie trading close to 80 cents US. With lower Canadian interest rates and a US rate hike all but assured the Loonie may week stay in its current range for some time. If you buy into that...
Hedging Canadian Market Risks
Patrick Ceresna
In full disclosure, it is my intention to be contentious in my views as I am disappointed by the lack of diverging opinions. The Canadian economy is in trouble and it is likely to get far worse than better and it is unlikely that the passage of time will fix the problem. Here are some simple truths you must consider when...
Understanding How to Exit before you Enter
Richard Croft
Option trading is rarely static. Cost / benefit metrics can change quickly causing one to rethink whether the initial assessment underpinning a trade is still in play. Often follow up strategies are required to either minimize losses on trades that miss the mark or up the ante on profitable positions. Ideally, follow up...
TFSA Contribution Levels Raised
Jason Ayres
Announced late April, but effective as of January 1st 2015, Canadians are now entitled to contribute $10,000.00 to their Tax Free Savings Account on a yearly basis, up from $5,500.00 last year. As of now, it makes the total contribution limit $41,000.00. According to news sources, the Liberals are on record opposing this...
Hedging the Canadian Economic Recovery
Patrick Ceresna
On February 24, 2015, Stephan Poloz, Governor of the Bank of Canada made the following statement: “The negative effects of lower oil prices hit the economy right away, and the various positives—more exports because of a stronger U.S. economy and a lower dollar, and more consumption spending as households spend less on...
Optimizing Your Covered Call Strategy
Richard Croft
Like a good dance lesson, writing covered calls is a two-step process. You need to be comfortable holding the underlying stock and should be happy if the stock is sold at the strike price of the short call. Having comfort with the underlying stock leads to the next step; which option to sell? Is there an optimum option to sell,...
Strategies for Income Investors seeking Yield
Richard Croft
Income hungry investors continue to ramp up their risk appetite in order to collect extra basis points in yield. Bonds continue to defy gravity as foreign investors flock to the safety and higher yield in North American fixed income assets. Canadian bonds have turned in strong returns as witnessed by the iShares Broad Bond...
Hedging a Diversified Portfolio
Jason Ayres
It is an accepted reality among investors that we are living in a global economy. If you take a look at when most of the volatility in the equity markets has occurred, it is generally around a Bank of Canada (BOC), Federal Reserve Open Market Committee (FOMC) or an European Central Bank (ECB) rate announcement and subsequent...
Have the Rail Stocks Been Derailed?
Patrick Ceresna
The past 4 years have been great for railway stocks. The boom in energy and exportation of resources since 2011 has seen revenues and profits soaring. Investors that participated in this story have been handsomely rewarded with stocks like Canadian Pacific Railway having risen 400% off of its 2011 lows. While I do not want to...
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