Busy day in the market for me.
music selection: “Welcome To The Black Parade” — My Chemical Romance
I was able to close out the UVXY position in my tIRA account. I initially purchased the Jan 2019 10 strike puts for 6.05 a share on 21OCT2016. Today, I unloaded at 6.50 a share. The trade was in force for 45 days and yields 60.33% on an annualized basis. I have not rolled to a lower strike yet as I have to wait for cash to settle.
The Italian referendum over the weekend was “NO” vote which is the condition I was hedging against. This almost certainly means “Quitaly” and possibly the death of the European Union as a whole. The markets shrugged in response. I closed my hedge for a 182 dollars loss including round trip commissions. I’d do it again.
In my tIRA account, I closed ABT, ADM, and AMLP. I replaced them with shares of Facebook (FB). Facebook trades at an attractive PEG ratio, is executing well, and returning cash to shareholders via buybacks. I see this as a capital efficient business that can compound wealth for a long time. I do not have enough shares to write covered calls against the position.
I also closed my short position in refiner Tesoro (TSO). TSO diversified its operations with an all stock buyout of a competitor in Texas. The thesis was that the difficult regulatory environment in California would continue to cause the company to struggle. The markets cheered the purchase and the short thesis is now less clear. I closed with a loss 348 dollars or 6.95% (45.31% annualized). I am sticking to my guns on my other shorts.
Devour your prey raptors!