I have been keeping my eye closely on EPD these days. I have been eyeing them EPD March13 $48 Calls. I been wanting to ask you guys what you think could be the January high for EPD during this run up, once this Fiscal Cliff mess hopefully goes away after December 31. In my humble opinion, $52 could be the high for EPD on this January dividend run up.
Are any of you planning to trade EPD or KMP in late January?
I agree with EPD potential for $52 before Jan EX. based on past performance. I would favor Feb calls because the high has occurred in last two days before EX in about 60% of the last four years. However, the last quarter was off the norm substantially. That and the current Washington mishmash makes me hesitate to do much. General market performance over the next few days could change that outlook.
By the way, another curious observation I made today was that someone either bought or sold 1,104 EPD January $50 Calls between 0.55 to 0.65 today. If they bought them, they are probably betting that EPD will rebound and go to at least $51 by January Options Expiration date. If they sold them, they possibly sold them for a loss.
Don't forget Feb Options are coming on-line today. Jan OPEX is early so I see some danger there with Jan Calls. FC is almost a certainty and danger there. I would wait until direction and economy is clearer. I was looking myself at EPD for the Long Feb50Call offset with the Short Jan49Put for .15 debit. If things were stable that would be my bet....but things are not stable...;-(
Good luck in whatever you decide. Hey, whatever happened to your Jan EPD Calls? Didn't you have about 2000 of those??
I have said it the past two quarters as well, but if you are looking to diversify away from the energy sector some UAN is another option. The MLP has shown the same cyclical pattern as the two pipelines you have mentioned and may be worth a look.