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Chesapeake Granite Wash Trust Message Board

  • j1stocks j1stocks Mar 21, 2013 6:14 PM Flag

    SA update : $11.42 for 15% return, $13.45 for 10% return

    Based on that in the SeekingAlpha link, I'm a buyer here. Just as there is panic selling there is euphoria buying. Those prices are based on NG @ $4, & oil $90 Sometime over the next 4 yrs those prices are sure to be exceeded for at least a 2-3 mo span if not longer. That's especially true if NG pumps start showing up in gas stations. Just don't go all in at once. If you were planning to invest say 40k in this buy 10k worth at the current price. Spend 10k more at 13, 10k more at 12.50, & 10k more at 12. If you do not have that kind of money, then buy/sell the options. If you look at the history of option prices for trusts like these the distribution is usually cooked in there so you're likely to get much mor than a 10-15% return on them.

    Sentiment: Buy

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    • For those who don't understand options, the Nov $12.50 puts reached $1.90 today. That's close to 3 qtrs for distributions if you owned the stock. If you sell 10 puts you get $1900 cash now & if the stock falls below $12.50 in Nov, you will have to buy 1000 shares at that price. If the stock is above that price in Nov, the $1900 is yours to keep.

2.20-0.05(-2.22%)Oct 21 4:00 PMEDT