We could amazingly be headed to the $30's. After the hedge funds totally discourage the buyers and beat this stock down to ridiculously low levels, they will load up on the cheap and then restart the positive news flow. I'm nibbling here and will add if we do see the $30's.
It's hard to watch EVEP slip everyday. I have to remind myself why I own several MLPs that are generally described as high risk. It's because I have a fundamental belief that the only thing we know for sure is that the demand for energy will increase every year. I should have bought both LNG and CQP when they were under 20. Lots of would've could've should've opportunities. I guess the point is that when it seems like you are dumber than a brick when it comes to picking winners, go back to your fundamental beliefs. If those have changed maybe you should do some reallocation. If they haven't don't let short term price movements force you into a bad trade. On the other hand, the hardest thing about investing is to sit back and say I made a mistake, In the case of EVEP I haven't reached that conclusion.
All the shorting could be connected to options trading by hedge funds holding puts. After they take profits on their options, we could see more short-covering ahead of the ex-div date. I wouldn't be surprised if EVEP hits 43 intra-day on Monday. It could also hit 39--this has turned into wild, unpredictable volatility for the next few days.
Trader-- I doubt it is options related as Put open interest is minimal. Short interest is a different story. I doubt any of the short interest is at all concerned with a .77 distribution when we are down over $7 on the week. But...... this is the type of move that you lock in your gains on. You make your target gain. You lock it in and move on. You don't risk your $7-20 gain against EVEP actually finally releasing some real news. Or just simply people seeing value in a 7.5% yield here. If you have $10 in your pocket today...how much do you risk for how much further? I wasn't short. Heck, I wish I were. But I know if I made this much this fast in a short, I'd cover and call it a big win.
That said. This can continue to sell off with disgusted longs and fund window dressing. But I don't know what short theory would hold too much longer. Even if EVEP announced a cancellation (and selling in pieces makes that highly unlikely) I don't see another $10 to the downside.
When the dust settles, buyers will come in. But, as a long, these guys spent a ton of credibility and caused a lot of damage. A 50% gain will still have a lot of unitholders underwater. But there are buyers for everything if the price is right.
keep in mind, I bought a lot of bloody cutlery here. JMO
Yeah, I think that's what the hedgies are doing today. They pressed their short positions hard this morning to see how many sellers they could shake out, and now they'll probably start covering ahead of the ex-div date next week. If they don't cover before then, they have to pay the dividend on their short positions. When most of the buyers move to the sidelines because of major uncertainty, hedge funds can knock down any stock that trades less than a million shares per day.
But now I'm looking for the same websites that have been writing negative stuff about the Utica to soon turn more positive and start writing articles with titles like "Is the Utica Selloff Overdone?" ....lol.....the whole thing gets ridiculous as these semi-pro analysts write one oversimplified article after another. You really have to go to oil industry publications to find objective analysis that isn't oversimplified for reading by all the doctors and teachers,etc. who read the popular financial websites.
Mark--Around .50 for the Jun $35 puts, not enough to take on the position. Hopefully we don't go that low, but if we do I plan to buy some long dated out of the money calls in order to waste some more money. Just kidding, I still believe, especially after seeing this ugly a beating, that we will see a nice rebound off the bottom. May be the only way I can get my money back.
True. But I sold expiring May $40 for a premium and will collect the dividend, so I have around $2 protection. Of course, this could be gone in one day at this rate, but plan to keep selling the $40 calls if we stay close to that level.