Stock Options
Writing covered call options to profit from a period of consolidation
Martin Noël
As can be seen in the following graph, the price trend for shares in the Canadian National Railway Company (CNR) appears to have faltered. The stochastic oscillator indicator has just fallen below 75, much like it did in June 2019. At that time, the price of CNR stayed in a channel for many weeks. As long as the oscillator...
Covered Call Block Trade on Canada Goose Holdings Inc (GOOS.TO)
Mehra Wealth Management Group
For almost 20 years, our team at CIBC Private Wealth has used defensive option strategies including Covered Calls, Selling Covered Puts and Collars to manage client portfolios. Our objective is to generate income from option premium in addition to dividends paid on stocks. Our primary focus is on wealth preservation. A Covered...
Improving order execution efficiency
Martin Noël
On July 27, 2007, the Montréal Exchange launched a penny trading pilot project that ended on February 26, 2016 with the implementation of a permanent program. Before the pilot project began, only options priced below $0.10 were allowed to trade with a minimum price increment of $0.01 (“penny trading”), while all other...
Covered Calls: Managing Risk Exposure and Generating Value During Volatile Times
Montréal Exchange
Key facts on covered calls This strategy consists of writing a call that is covered by an equivalent long stock position. It represents a simple way for investors to manage their short-term risk exposure, allowing them to earn premium income (i.e. the money received from writing the calls) in return for part of the stock’s...
Profiting From Expectations of Relative Stability
Martin Noël
Shares in Cogeco Communications Inc. (CCA) were trading at $104.36 at this writing on August 9, 2019, but as the following graph shows, they jumped on July 10 when the company released its latest financial results. After topping out at $107.05 on July 16, prices moved in a relatively narrow corridor of $103.33 to $107.35....
Low-Cost Insurance Against a Drop in Share Price
Martin Noël
As the following chart shows, the price of shares in Waste Connections Inc. (WCN), which is trading at $123.70 as these lines are being written on July 25, 2019, has delivered an excellent return of 28.6% since bottoming out at $96.16 on December 24, 2018. The chart shows that the stochastic oscillator (Stoch), an indicator of...
Writing Call Options to Protect a Position
Martin Noël
As the following graph shows, shares in the Bank of Montreal (BMO) has been in correction territory since falling below the 13 and 34-day moving averages. The stock’s last rally toward $101 is similar to one near the end of November 2018, just before the stock plummeted by almost 14% in the space of a few weeks. Furthermore,...
What do Cannabis, Nelson Peltz and Hedging Have in Common?
Jason Ayres
On March 13th, Aurora Cannabis Inc. (TSX: ACB) announced that they had appointed Nelson Peltz as a Strategic Advisor to help explore potential partnerships and advise on the company’s global expansion strategy. This is a big deal given Mr. Peltz’s business history and reputation for delivering results. For more details...
Options Brief – Week of August 7th
Montréal Exchange
The Canadian marijuana market is preparing for a major development: the legalization of recreational use of cannabis. While some may think that legalization will boost the Canadian economy, others believe that marijuana stocks are simply overhyped. One of the largest Canadian marijuana stocks company, Canopy Growth...
A not so TD-ous trade
Christopher Thom
TD is an extremely well-run bank with diversification across many business lines and geographies. The share price has pulled back from its 52-week high of $71.31 set back in late February by around 8.5%. With shares hovering around the $65 mark, I want to pick up some yield or look to get long the stock at even lower prices. At...
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