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Calumet Specialty Products Partners LP Message Board

  • bluedreamdreamer bluedreamdreamer Mar 28, 2013 9:51 AM Flag

    covered calls

    buy shares at 37, sell the nov 40 for 1.40 for basis of 35.6, collect three dividends in meantime for 1.95, if its called away great that'ss 27% return if not fine I'll hold for dividend going forward until pipelines and rail catch up with expanding production to narrow crack spreads. Meantime also got some cheap may 35 calls as a punt on a near-bounce back after the SO effect dissipates

    thats what i just did anyways, conservative (?) way to add to my (presently a bit overweight) position in refiners which is mostly in the risky small cap MLP variable pay refiners ALDW, CVRR and NTI

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    • if you like the stock and want to start accumulating, it might be a good time to sell april or farther out 35 naked puts and collect the premium or get the stock at a lower price than 35

    • i'll tell you a little story. i've been "investing" for 25 years now. i have 5 different brokerage accounts and two ira accounts i manage. i have always been very conservative in the brokerage accounts, rarely investing more than half the money in equities and almost always holding just a few stocks. my goal with the brokerage stocks was to just "keep" my money - maybe make a few bucks. i traded infrequently. in the ira accounts, primarily because i didn't have to report the sales or income, i decided i was going to use those accounts to "trade" and make lots of money. long story short: after 25 years, which is a very long track record, my 5 brokerage accounts gained almost to an account 15% annually (remember, with only about half the money invested), and the two ira accounts -- one has a 25 year yield of -1% and the other -5%. go figure....

      • 1 Reply to parkchair
      • ya I've read research saying that for the average investor, buy and hold is typically more profitable in long run than trying to time the markets and such by trading. I am still glad I hedged my entry after today's precipitous selloff in the refiners though

        may add a bit more if the morrow brings more sorrow for the short termists, as medium term refiners still in sweet spot although deutsche bank came out with some strong buy recomendations for MLP's but did not include refinres, mainly the commodity- (and crack-spread) insensitive pipeline oil and gas shippers

    • November is far away, why not sell may 40s for 40 cents and collect 3 bucks in five weeks.

      • 1 Reply to petarbuku
      • I'm not sure it'll hit 40 by May expiry (CLMT had a near parabolic run since February, I'm more worried about downside than planning on upside given the mkt at all time highs) but if it does run quick my calls will be profitable and I wanted more downside protection than 0.40 plus I want to harvest more than one dividend- I'm not going to have a lot of time this summer to constantly fnd new opportunities this summer, I'vll have more time next fall. SO harvesting dividends, more margin of safety, more time for cash from SO to be to effect in positive way is main reason. And the "sell in may and go away" trade may be on again this year so May expiry probably a decent target although for that I woulda picked the 35 calls to make sure I'd be out. But the refiners (and, OT, mortgage servicer providers) are in the sweet spot right now and my thesis is that crack spreads will remain favroable for refiners through at least this year, so nov seemed "safe"

    • that a way to go investor....(0_0)

      Sentiment: Hold

26.05+1.5100(+6.15%)Jan 26 4:00 PMEST

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