If GLOP is buying the ships from GLOG where is the benefit to GLOG longer term...? It seems GLOG's business size contracts. Could you explain the drop down concept, please?..
Seemed investors were disappointed by the dividend announcement yesterday, but changed their others found 7% appealing today....anything else to account for the 3%+ move??...
Pretty well timed call simulpalo68, the actual low coming just a few days after your post and a dollar or more lower. It looks like the royalty legislation may take a few more percent off the top, but it looks like with silver catching a bid at last that higher prices are on the horizon for the shares as it breaks above a long term downtrend.
...."it also gives me downside protection to $17.24" - this should read "OR it gives me downside protection to $17.24." Important difference is that between "also" and "or". If price declines to $17.24 your nice 6.7% premium offsets price decline..you make nothing. The problem is, and probably the one the managers of CEF are facing, is if the price declines at a greater rate than 6.7% at any time during the period between now and February expiration. Two down days of 3% and the position will be well into the red as the decline in the option will only be about half the decline in the stock, especially if the decline occurs early in January, in this case.
A position that involves the sale of covered options, which limits upside potential to in your case with GDX to about 6.8%, while presenting exposure far greater than 6.8% on the downside, ultimately is a losing game....as we are witnessing in GGN..
The natural reaction in the event of a decline below your "protection" is to roll down your strike in order to get more premium, hence more protection. Then in the event of a rally you are called away at a price below your initial purchase, your incur a loss on the stock, maybe you earn enough premium overall to offset the stock price loss...maybe.
I think the only way to prosper in this game is to be right with respect to the level the stock might drop...say maximum $16 for GDX....and repeatedly sell the $18.50 calls regardless of where the issue is priced at roll over time, whether above or below. Sometimes you'll get high percentage premiums (or protection) other times low; but moving the strike price about up or down is the big mistake either in the event of a loss in the stock's value or a gain...
(Of course in the case of an outsized move say to $25 in GDX you might wish to move up to the $20s or $22s.)
Covered options sales is a much trickier game than it is sold to be. Premium collection and protection are the same; one or the other - , Good fortune to you
Don't think the game is over for AG, though it might be a tough haul as silver bases between $16 and $19 before the next major QE program is announced...
If you get filled I'll buy with you...maybe on a metals wash out at the end of the year, like last. I have a suspicion that the metal markets will be controlled through the end of the year for derivative settlement purposes, and then POP...If it is from $2.5, which I doubt or $4 which I believe it ought to be 50% or more...and the lower she goes as in to $2.5 the MORE the POP. See you at $7.50 in January.....
How low can can the value of the reserve go...??? Anybody with a time horizon of a year or more will be rewarded at these sub $4 prices....in my opinion and admittedly dreams...
Good for your sakaneft....thank you for supporting the cause..mine at least....Now the proud owner of some Jan $5 calls, priced at 10 cents. Given the headwinds of deflation, lower oil prices and contracting economy, I frankly don't have very high hopes for these babies. But a little post tax loss selling rally action might see AG get to $7.50...With Silver up to $20, my goodness I'll be delirious
beabaggage, appreciate you steady tone in the face of the nearly 20% sell off. I don't suppose you have seen anything about production that would concern you - as in declining rates there of?
Without having all the answers I would like from a good accountant analysis of the funds earnings I think investors have come to learn that a large part of the monthly distribution is return of capital. Secondly the funds administration cost have eaten a big hole in premium earnings. Gold stocks are back to 2008 lows, energy is tanking, its little wonder the fund is falling in price...option premiums are not covering the drop in prices of the underlying.
Reduced further this week..
The fund earns income selling options but if the underlying stock falls more than the premium earned there is a loss...Additionally, the fund sells ever lower options during price declines and gets caught at the bottom with options moving against them with an upside ceiling on their stocks' gains.
Full round trip this year...wait till the miners and energy bottom before committing big bucks to this game. my advice to me.
Looks like "we" were wrong to expect consolidation in the week beginning September 22. Something radical is going to have to change to save off another down year for this miner and most others. Tax loss selling starts soon.
I like the way this ETF is structured - to change its composition given individual company developments.
Also it seems a good fit with XLV, the healthcare ETF. Very good day, here, Wednesday Sept 24 - new highs, increase in volume.
Premium has been knocked out of this issue. It has traded both sides of NAV this year and was especially under NAV late last year. Sentiment swings, I guess. I have promised myself to take another look at the latest earnings report for GGN with the hope of understanding some of its unclear parts - at least to me. Operational expenses seemed quite, consuming a huge amount of premium income, and there was a line that was well into the millions of dollars that was headlined: "return of capital."
I am not sure I fully understand what the real returns have been on this investment, even in the good first month period of this year.
I would like to believe that a few professionals could generate positive returns buying stocks and selling options on them. This works in a steady to rising market but not in one that is in free fall as we've seen lately for miners and energy companies and certainly as we saw in late 2013 and 2008. One percent a month in distributions doesn't cut it when the share price is falling that much a day.
It should also be considered that there is more downside risk than upside potential in the course of the strategy affording a 9 cents monthly distribution. By selling options on stocks owned, upside is limited, capped or reduced even when the position is rolled up and higher strike options sold. Meanwhile the downside is only partially protected by selling options, and ultimately one has low priced covered calls sold at the bottom.