I usually buy in on both sides. Sort of an averaging strategy. Often the post split sell off is only one side.
I'm long and have held WPX off and on for 4-5 years.
But to hedge have written covered calls on half of my current position.
On native copper, I have fond memories of prospecting on the slag heaps of abandoned mines in the Keweenaw peninsula with my late father. Have a lot of nice samples. Good hobby for a chemist.
As a chemist with a lot of group 7 experience (a former student is coinventor on the old Fritzberg patent from Utah see http://jnm.snmjournals.org/content/27/1/111.full.pdf) I'm interested in your technical take if you have time and are so inclined. I'm long on this equity since the IPO, and have averaged down since.
Nice feature highlighting BSM in 07 June Barron's (on-line)
The master limited partnerships still standing that do not face a cash squeeze are those requiring no substantial reinvestment in their operations, the model for mineral rights master limited partnerships, which own the rights to exploit the oil and gas beneath their territory. Unlike the capital intensive businesses that predominate in the oil patch, mineral rights MLPs are essentially tollbooth operators who collect fees by leasing their rights to explore, drill and extract oil and gas for a finite period of time. It’s a cash flow generating business with minimal balance sheet debt, a structure well suited for the pass-through MLP model that distributes earnings to unitholders. The mineral rights companies didn’t leverage themselves in the fat times, so there’s no need to expend cash deleveraging today.
The largest of the mineral MLPs is Black Stone Minerals ( BSM ), which came public last May. The units paid an annual distribution of $1.05 over the past four quarters for a yield of 6.8%. Beginning this quarter, the annual distribution is scheduled to rise by 10 cents per unit each year for the next three years, as specified in the offering. Given the tollbooth nature of Black Stone’s business and the fact that the company has minimal debt, the distribution and the underlying business appear secure. Technological improvements in fracking technology mean the company is sitting on an asset base which is primed to be developed and monetized over the next decade rather than depleted, again, at no required capital cost to the mineral company. And, if interest rates increase, even gradually, commodity prices, like oil, will likely move higher, which would also benefit Black Stone.
and about 5 more paragraphs
what's up? short covering? I sense a lot of short activity while the stock has drifted downward the last 3 weeks
good discussion, that' what these boards should be (so much garbage on some).
I forgot to mention that I wrote calls on SUPN earlier at 16 and 17. Neither exercised. So I got to profit from the swings without having to pay capital gains (of course, I paid short term gains on the profit from the calls). SUPN has certainly had its swings, I have had positions for about 4 years.
Selling the covered calls commits me to holding the shares, unless I wish to go short.
As a little more background, I was also considering selling September 20 calls at $1.65, but the order for December 21 calls at 1.65 executed first.
Those who are strictly investing for call income would probably have preferred the September position. However, I consider that I primarily invest for capital gains, with call income as a sweetener. I'd be most willing to sell half of my position at 21 today, why not get paid extra for this possibility in December.
Another aspect of the December call is that if SUPN is trading at 22 or so and I WANT to defer the gains into 2017 I can, by doing a trade termed a "roll", change the date to March or June, and pocket a little extra money, perhaps a buck or two. Of course, the stock could decline to 20 or tank to 10 in the interim and then there would be no sale (but in the former case I could write another option to sell at 21 for a good premium).
There are possible downsides to all of this that you explicitly acknowledge. If another company now tries to buy out SUPN next month, for example at a price of 26, I lose out (21 + 1.65 would be my effective sales price). But that's one reason I only wrote a call on half my position.
If you trade options like I do, sometimes you will not realize the maximum possible gain in an up market, but one is always generating often significant income in static or down markets.
I wrote some options on TTPH when it was 40 or so and watched these shares come crashing down (I still hold them, and have averaged down a bit; but I also sold shares via calls at 25 and 30 on the way up).
I hope this answers your questions. Good luck whatever strategy you go with.
Allergan (AGN -0.2%) announces the successful completion of two studies, OCUN-009 and OCUN-010, assessing the Oculeve Intranasal Tear Neurostimulator for increasing tear production in patients with dry eye disease, a chronic condition affecting over 25M people. Both studies met their primary and secondary efficacy endpoints. The company intends to file a New Drug Application (NDA) with the FDA in H2.OCUN-009 was a one-day study in 48 subjects with aqueous tear deficiency that compared Oculeve to two control devices. OCUN-010 was a six-month study evaluating the efficacy of Oculeve in 97 patients with aqueous tear deficiency.The neurostimulator is a handheld device that is inserted into the nostril to stimulate the nerves serving the lacrimal gland, an almond-shaped gland for each eye that secretes the aqueous layer of tear film. Allergan obtained the rights to the product candidate via its acquisition of South San Francisco-based Oculeve in July of last year.