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Supper quicky note #6

Again, the market ran up yesterday in amazing session. It added to its overbought state and today we are correcting from yesterday’s run. Well, it doesn’t mean that this is the beginning of a bigger drop, but it may become one.

The market stalled at its crucial top marked on April 11, 2013 and now we are awaiting if it goes over the top (break the resistance) or this will be the first day marking lower high and thus potential reverse in trend.

However institutional money are still moving funds from bonds and other markets into equities and it is said that retail investors are still mostly sitting aside, so most likely, this trend isn’t over yet. At least this is what I have read in the news. Who knows. These days it is not much advisable trusting the media.

In the morning the market swung down from 159 opening all the way down to 128 and recovered most of the morning loses.

 


 

A stock I was interested in recently was Pitney Bowes. I was OK to own the stock, but I didn’t want to buy out right. So I decided to sell a put contract to get assigned into the stock. Here you can see my trade details of PBI put selling

Today the company announced 50% reduction in dividends to pay its debt. Although it is a good move in my opinion, it removes this stock from a list of candidates for my dividend growth money machine.

That said, I am no longer interested in this stock and I will do all it takes to let the put option expire worthless.





4 responses to “Supper quicky note #6”

  1. I knew PBI was going to have to cut its dividend soon. It’s basically a dying industry. Good luck in getting out of that put.

    • Martin says:

      Yeap, you were right on spot.

      Well, I let the time value evaporate and roll out and further in time as long as I will be able to liquidate the contract. If it won’t work, then I take a loss.

      • good strategy on getting out of it. I always hate to see companies cut dividends.

        • Martin says:

          I decided to roll over right now, when it is cheap for me to do instead of waiting longer and be forced paying more to get out of the current trade. So as of now, I am out of the 14 strike contract and offset it by January 12 strike contract. Let’s see what happens. Since I am trading this on margin, it doesn’t tie too much of my funds, so I am fine now.

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