I also ended up closing my position when NTI returned to $27. Whether or not it has a final bounce Monday (would not be surprising given how restrained it's felt in the past few days, including vs. some peers), I kept discipline & booked a reasonable gain today.
Nothing about this market would surprise me much at this point. We could rip 1000 Dow points higher or lower, and it would make about as much sense.
Now to find the next Quarter Horse to bet on...
Looks like that horse race got rained out today...
You guys throwing in the cards or holding out a little longer? I sold half my position earlier today when NTI first headed negative. TBD what I'll do with the other half.
Decided to get my feet wet with pairs. Shorted MITT (all intercepted at fractions above 25.46) and bought an offsetting position in AMTG @ 21.49 right before it started trickling down (I'm lucky that way). Let it ride...
Thanks for your thoughts. My compass is likely a little out of whack right now as I've had so many opportunities get away from me in the past 1-2 months, and I have a lot of cash on the sidelines (maybe too much given the very possible scenario that the market could keep running for a while).
At what price do you think CVRR starts to become a buy for you in the near-term, even if the next dist is far away? Or would a purchase in the near term simply not meet your investment style/objectives right now?
CVRR price was dropped by the recent distribution, now being dropped by the secondary, and trading ~30c below the $30.75 SPO price (with SPO not over yet). Only a short history on the stock of course, but since getting to $30 in Feb I don't think it's dropped below $30 for more than a week.
Thoughts on buying shares here near $30.50? How do you see this one going in the coming months, from a stock and/or sector point of view?
If it wasn't for the dist + SPO combo, I would likely not be flirting with the idea at all, I would be more likely to place a bet when the next distribution starts to approach. Frankly the the sector seems out of favor while the overall market keeps clawing higher... And maybe that's my answer, but SPO's always catch my interest.
Robin: NTI, 5/23 is the "on-record date", so you have to subtract 2 business days to establish the ex-div date. Monday 5/20 is therefore the last day before it trades ex-div.
Regarding margin accounts, you'll have to do your own DD, but personally I would not automatically rule them out unless you come up with concrete reasons other than "because I don't plan to use it and don't like the danger of borrowing more than I have". Too wordy to get into, especially for someone just starting out, but trust me that someday you could hit a situation when running up to an ex-div date where you would want to exercise all your options and then instantly sell the shares (or short first, then exercise), rather than taking a less-than-fair price for selling the option itself. For that brief second between the two (broker-assisted) trades, your account could technically utilize the margin. Ask me again in a year :), but IMO for now only rule out the margin account if you "have to".
Happy to help with options advice where I can.
Gotta imagine I'm not the only one disappointed by NTI's stock performance so far today. At first I thought maybe the look-forward to next qtr (maintenance/closure), even though well-telegraphed previously, might be muting a rally. But I'd guess the bigger answer is simply the peer group of variable MLP refiners is down as a group today and NTI is actually doing a "good enough" job just fighting that pressure. CLMT & ALDW down 1.2% & 1.8% respectively. CVRR down 3% but that's likely a function of the SPO announcement.
The big-boy refiners on the other hand are all up nicely today though, +2% (VLO, TSO, PSX, MPC, etc).
Bottom line: I'm thinking to give NTI a couple more days to run, but if it shows no strength and/or starts to trickle down along the way, then I'll throw in the towel at that point.
LNCO I've been happy with so far and am up with a little buffer on the positions. Given my LNCO exposure by the way I'm no longer looking at BRY for a "backdoor", I don't want to go any deeper than I already am. Sure hoping the story remains the same with Linn and that it doesn't move too far in either direction in coming months; would love to continue to make new bets with it.
Looking forward to seeing how NTI does this week and if it runs enough to make me want to lock in gains or not. I think NTI goes ex-div on 5/21 by the way.
Good luck to us!
Though I was thinking earlier today to let NTI go, in the final minutes before the market closed I decided to get some skin in the game and bought some shares. I balanced that by not making the "oversized" type of purchase that I tend to make.
I'm reading through the report right now. So far so good; and nice to see the stock currently up 80c+ in AH.
Very helpful, thanks. In this case I think I'd also utilize the shares themselves, to be nimble. If I put this trade on it will likely be in part as a learning experience, so no need to let the wider b/a spreads and lower liquidity issues of options on these entities add any complications.
Would have been good to have started the trade this morning, when CVRR was up & NTI down. They have both since reversed.
As a late-comer to the MTGE forum, I've seen a few references here & there to "pairing", with most of my understanding from implication/inferences.
The NTI & CVRR combo caught my eye because I at least have some familiarity. Had been thinking to make a bull play on NTI given the upcoming dist, but haven't liked how weak it's been lately, and for CVRR, I let it get away from me. I think in NTI's case there might be some concern about impact of April maintenance?
In any case, did you put this pairing trade on? I'm assuming a 50/50 dollar balance, and end the trade no later than NTI's ex-1? For a pairing, do most initiate the 2 positions at the same, and then maybe leg-out as a judgement call, or are there some good "discipline rules" to follow re: legging or not legging? Any other general rules/advice on how to utilize pairing and what to watch out for?
Thanks for any advice you guys can offer.
Thanks Robin, I've decided I'm good for now though without buying shares. Linn and I are currently dating, I may want to eventually marry her for the long term but the thing is, she lives not far from 15500 Dow St at the intersection of 1675 S&P Blvd, it may be a treacherous location and I'm not sure I want to commit too much yet to anyone living near there given the crashes that can occur on the approach ;).
In other words, I am not eager to commit much additional/new $$ to this running market right now unless the investment has some insurance or buffer (like options can provide). If LNCO stays above $35 by late June, my return would be 22% (annualized) on the "conservative" piece, and 47% on the "more aggressive" piece if the stock is above $37.50. No complaints on my end, absent a big market pullback before June is out. Certainly possible but I would guess -- not in the very near term.
I bought back my Apple naked puts yesterday in the $1.6 range (originally sold at $14), so I am out of Apple completely. While I feel pretty confident that Apple isn't going to drop below the $400 strike in June, there was very little $$ left to justify holding the position any further. Better to use the $$ leverage towards a different stock, or just to reduce overall risk and also have added dry powder. Plus I'd like to see how the market reacts later in the year when Apple's next iphone is likely still small-format, I wonder if that is priced into the stock already.
LNCO I created 2 new naked put positions yesterday, both for June, and I feel pretty good about both. One has a break-even in the high $33's, the other (which has a $37.50 strike) breaks even at low-$35's. I'm not a technical trader so all I can really say to your posts is that we agree on the conclusion -- LNCO going below or even to $35 seems unlikely. Given my interest in holding a long term position, I actually felt the risk on my first play was more to the upside -- that I was being too conservative and could be leaving too much potential profit on the table on a rare opportunity like yesterday seemed to be. Thus I created a 2nd Naked Put play at a higher ($37.50) strike, in a quantity I'd be good with owning long-term should the shares be "Put" to me. I still suspect even that play will end without me owning shares. In which case, I'll keep writing semi-aggressive naked puts to collect premium and eventually get Put into a position at a discounted price. That's my intention anyways. The overall market may have other plans.
Hadn't seen that. Good to hear. Not a stance change for Cramer, who was pushing LNCO strongly a couple months ago. Right now I am hoping for a little additional intraday weakness on the PPS to get my final naked puts through, but debating "forcing" the remaining trade on the fear of it getting away from me.
Anyone (Jtrader?) follow LINE/LNCO? Ex-div today and taking one heck of a PPS hit in combo with a Barron's (re-hash) bear article. I sold some naked puts today, LNCO June $35's, and now considering if I also try a higher strike piece as potentially giving me a good net price for buying long term shares. Would love to get some opinions since I may be caught up in the heat of the moment. Would hate to jump in with 2 feet if the LT story may actually be changing. Thanks
Hopefully I'm not catching a falling knife, but I'll take a gamble that LNCO is not going to fall below its $35 52-week low (aka all-time low since inception)... Just sold some LNCO June $35 naked puts at $1.25/sh. This means that after 6/21, if LNCO is above $35, I keep $1.25/sh and the play is over. If it's below $35, then I will be forced to buy LNCO shares at $35 - 1.25 = $33.75 cost.