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Chesapeake Granite Wash Trust Message Board

  • marklibera marklibera Sep 10, 2013 7:01 PM Flag

    Closed put position

    Well it doesn't look like there is going to be a negative Seeking Alpha article on CHKR and it looks like the price has bottomed in the lower $13 level, so I decided to book my profit on my CHKR puts.
    Will be interesting to see if we start a run into next quarter's dividend announcement. Last quarter's move was almost $2 from a similar level. Then it will be time to play the puts again.

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    • Mark, to me the run all depends on if people are confident in CHKR's ability to hit the $0.71 distribution subordinate threshold. If they are, then this will run nicely and if they hit that distribution, then there will be confidence in their ability to hit the $0.69's and $0.68 ahead. I am not quite confident enough in the $0.71 to add to my holdings at this time and instead will just hold and watch these quarterly results closely. This quarter will be a very good indicator on if CHKR can deliver on the distribution for the next year+.

      Sentiment: Hold

      • 1 Reply to eddie6317
      • Eddie, I have chosen not to try to play the divy runs in these Trusts because there is still the other risks (Fed Taper, war, debt ceiling debacle etc) that could upend the overall market. I do think, however that the next divy announcement could be a trap as they could still pay the sub threshold but set up to miss it in February. They warned last quarter that the first miss could be for the Feb payment. Frankly, I am surprised that this disclosure did not garner any analysis out of the Seeking Alpha article writers. Maybe they were off for the summer?
        BTW, I think this has almost nothing to do with investor's confidence in the distribution. I think it has more to do with HFT trading programs, hedge funds and maybe some yield chasing.

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