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Position Follow-up – Power Corporation of Canada (POW)

Martin Noël
October 31, 2016
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2 minutes read
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Underlying Asset

 

Power Corporation of Canada (POW)

Power Corporation of Canada is a diversified international management and holding company. Through its subsidiary, Power Financial Corporation (TSX), it owns interests in companies in the financial services sector in Canada, the United States and Europe. Through its subsidiary, Square Victoria Communications Group, it owns interests in companies in the communications and media industry. Furthermore, Power Corporation actively owns and manages a portfolio of investments in the United States, Europe and China. The company manages $500 billion in assets.

 

Position Follow-up

 

This week, we follow up for a third time our campaign to write put options on POW.

View the previous articles:

July 4, 2016

August 22, 2016

September 26, 2016

 

Prior Results

Expiry on August 19, 2016

  • Profit = $550

 

Expiry on September 16, 2016

  • Profit = $450

 

Expiry on October 21, 2016

  • Profit = $350

Total Profit of $1,350

 

New Position

 

POW appears to be on a bullish trend, after having recently broken through $28.50. Should it reach $28, this could represent an attractive buying opportunity. Consequently, we raise the strike price on the put options to $28 for an expiration of December 16, 2016.

 

  • Sale of 10 put options, POW 161216 P 28, at $0.51
    • $510 credit

 

If the put options are in-the-money when they expire on December 16, 2016, the investor will buy the POW shares at a cost of $26.14, or $28.00 less the previously realized profit of $1.35 and the $0.51 premium on the new position.

If the options are out-of-the-money on expiration, then the investor will realize the maximum profit of $510, for a potential total profit for the campaign of $1,860.

 

Further Action

 

No further action is planned at this time.

 

Good luck in your trading, and have a good week!

 

The strategies presented in this blog are for information and training purposes only, and should not be interpreted as recommendations to buy or sell any security. As always, you should ensure that you are comfortable with the proposed scenarios and ready to assume all the risks before implementing options strategies.

 

Martin Noël
Martin Noël http://lesoptions.com/

President

Monetis Financial Corporation

Martin Noël earned an MBA in Financial Services from UQÀM in 2003. That same year, he was awarded the Fellow of the Institute of Canadian Bankers and a Silver Medal for his remarkable efforts in the Professional Banking Program. Martin began his career in the derivatives field in 1983 as an options market maker for options, on the floor at the Montréal Exchange and for various brokerage firms. He later worked as an options specialist and then went on to become an independent trader. In 1996, Mr. Noël joined the Montréal Exchange as the options market manager, a role that saw him contributing to the development of the Canadian options market. In 2001, he helped found the Montréal Exchange’s Derivatives Institute, where he acted as an educational advisor. Since 2005, Martin has been an instructor at UQÀM, teaching a graduate course on derivatives. Since May 2009, he has dedicated himself full-time to his position as the president of CORPORATION FINANCIÈRE MONÉTIS, a professional trading and financial communications firm. Martin regularly assists with issues related to options at the Montréal Exchange.

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