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What did you buy? What might you buy??

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  • Nov 25th, 2020 1:55 am
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Deal Addict
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Aug 4, 2014
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dec12 wrote: I have 2 covered calls that will be expired next Friday. Slightly ITM.

From my experience, I learned to be happy with the expected premium and let the shares be called. Got burned with TEVA, bought the calls back at a loss and watched the shares went further south. Watched the values of my soon to be expired 2 calls went up by $1000, and to see it backs down to about $140.
Yep, that's the balance I'm trying to find: at what price I'm ok to part with shares if need be / are the premiums worth it :) With VTI I'm ok on both counts, with IEMG it was rather a gamble (higher atm premium for the hope that the shares won't get called/but I also keep ~half of the position un-optioned (for now) in case they do) Next batch of VTI calls I'll try to sell for less premium/shorter term - to see if I can "rinse and repeat" (c) @porticoman :)

Good luck next Friday - and in March! :)
Deal Guru
Jun 26, 2011
13562 posts
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GTA
RolandCouch wrote: WTF happened to GoEasy today?

I just bought some.

Their earnings report looked great. Good Revenue, Loan Book, Net Income growth all around...good forecasts for future growth.

Opened up 7%

Now down 16%

Very confused.

Just bought some shares at $38.02
Going to add to this with $ from NFI - had a stop in on NFI at 41.50

I still don't understand the reaction to GSY today....any second opinion?
Deal Addict
Jun 3, 2009
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RolandCouch wrote: Going to add to this with $ from NFI - had a stop in on NFI at 41.50

I still don't understand the reaction to GSY today....any second opinion?
I was wondering the same. Maybe the credit risk has skyrocketed? I haven't found any sell-side downgrades.

Thu Nov 08 00:06:21 2018 EDT
goeasy Ltd (TSX:GSY) Shares Issued 14,800,892 Last Close 11/7/2018 $45.27 Wednesday November 07 2018 - News Release
Mr. David Ingram reports
GOEASY LTD. REPORTS RECORD RESULTS FOR THE THIRD QUARTER 2018
goeasy Ltd. has released its results for the third quarter ended Sept. 30, 2018 .
Third quarter results
Revenue for the third quarter of 2018 increased to a record $130-million , an increase of 26.5 per cent over the same period in 2017. The increase was driven by the growth of the easyfinancial consumer loan portfolio, which reached $750-million by quarter-end, up 58.5 per cent from $473-million as at Sept. 30, 2017 .
During the quarter, the company generated $221-million of loan originations, up 40.5 per cent from the $158-million in the third quarter of 2017. The growth in originations was primarily fuelled by consumer demand for the core unsecured loan product, further expansion of risk adjusted rate loans, the growth of secured lending and offering consumer loans through the easyhome leasing stores. The increased originations led to growth in the loan portfolio of $63.0-million in the quarter, up 32.0 per cent from the $47.7-million in the third quarter of 2017. The net charge-off rate in the quarter was 12.9 per cent, down from 13.1 per cent in the third quarter of 2017 and at the midpoint of the company's guided range of 12 per cent to 14 per cent for 2018.
The result of growing revenues and increasing scale produced record operating income, margins, net income, earnings per share and return on equity. Operating income grew to $32.9-million , up 37.5 per cent from $23.9-million in the third quarter of 2017, while operating margin expanded to 25.3 per cent up from 23.3 per cent. Net income in the third quarter was $14.3-million , up 23.6 per cent from $11.6-million in 2017, which resulted in diluted earnings per share of 97 cents , up 19.8 per cent from 81 cents in 2017. After adjusting for the effect of IFRS 9 (international financial reporting standards), which would have elevated the loan loss provision and bad debt expense in the prior year, diluted earnings per share were up 47.0 per cent compared with the estimated 66 cents per share in the third quarter of 2017.
"It was a solid quarter for the company, highlighted by record financial results," said David Ingram , goeasy's chief executive officer. "The strong revenue growth, combined with stable credit performance, led to improved margins, record earnings per share and a record return on equity of nearly 24 per cent. We remain on track to finish 2018 near the midpoint of our guided range for both the ending consumer loan portfolio and the net charge-offs. During the quarter, we also made several enhancements to our balance sheet. Securing lower-cost capital in advance of its use reduced earnings per share by approximately 14 cents in the quarter, while the equity raise completed in October served to lower our total leverage. Combined, we were able to obtain the capital we need to fund our growth until the third quarter of 2020."
Other key highlights
easyfinancial:

Revenue increased to $95.7-million , up 39.2 per cent from $68.7-million in the third quarter of 2017; 61.9 per cent of net loan advances year to date have been issued to new customers, consistent with 2017.
Average loan book per branch improved to $2.7-million from $1.9-million in the third quarter of 2017, an increase of 42.1 per cent.
Average weekly delinquency rate throughout the quarter was 4.4 per cent, consistent with the same period of 2017.
easyhome:

Same-store revenue increased 6.2 per cent, up from 3.0 per cent in the third quarter of 2017.
Consumer lending portfolio within easyhome leasing stores was $17.2-million , up from $2.9-million in the third quarter of 2017.
Revenue was $2.2-million from consumer lending, versus $300,000 in the third quarter of 2017.
Operating margin was 17.2 per cent for the quarter, an increase from the 16.4 per cent reported in 2017.
Operating income was $5.9-million in the quarter compared with $5.6-million in the third quarter of 2017.
Over all:

34th consecutive quarter of same-store sales growth;
69th consecutive quarters of positive net income;
Total same-store revenue growth of 26.2 per cent, up from 21.3 per cent in the third quarter of 2017;
Compound annual growth in diluted earnings per share of 37.0 per cent since 2001;
Record return on equity of 23.8 per cent in the quarter, up from 21.3 per cent in the third quarter of 2017;
Net external debt to net capitalization of 68 per cent as at Sept. 30, 2018 , below the company's target leverage ratio of 70 per cent.
Future outlook
In the second quarter of 2018, the company provided revised three-year targets for 2018 through 2020. These targets remain unchanged.

THREE-YEAR TARGETS

2018 2019 2020

Gross loan receivable portfolio at year-end $825-million $1.1-billion $1.3-billion
to $875-million to $1.2-billion to $1.4-billion
easyfinancial total revenue yield 54% to 56% 49% to 51% 46% to 48%
New easyfinancial locations 20 to 30 10 to 20 10 to 20
Net charge-offs as a percentage of average
gross consumer loans receivable 12% to 14% 11.5% to 13.5% 11% to 13%
easyfinancial operating margin 38% to 40% 42% to 44% 44% to 46%
Total revenue growth 26% to 28% 20% to 22% 14 to 16%
Return on equity 21% plus 24% plus 26% plus
"With the fourth quarter already off to a strong start, we remain excited by our future initiatives and our ability to execute against the targets set for the next three years," Mr. Ingram concluded. "We are still at the early stages of a significant period for growth that will continue to build our leadership position in the non-prime lending space. To this end, I am extremely proud to have guided the company for the last 18 years and have always been inspired by the meaningful relationships that our front line staff have worked tirelessly to build with the customers in their communities. In January, when I take on the role of executive chairman, I will pass the reigns over to Jason Mullins to assume the role of CEO, who has demonstrated during his eight years with our company the qualities and commitment to be an outstanding leader for the future of our organization."
Balance sheet and liquidity
Total assets were $985-million as at Sept. 30, 2018 , an increase of 62.8 per cent from $605-million as at Sept. 30, 2017 , primarily driven by the growth in the consumer loan portfolio and the additional cash on hand to finance future growth.
During the quarter, the company issued $150-million ( U.S. ) of notes payable due on Nov. 1, 2022 , which generated net proceeds of $203-million (Canadian). The issuance of the notes payable was at a premium to par, resulting in an attractive interest rate (excluding the effect of financing charges) of 6.17 per cent. On Oct. 10, 2018 , the company also closed its offering of 920,000 common shares, at a price of $50.50 per common share, for aggregate net proceeds of $44.3-million .
Based on the cash on hand at the end of the quarter, borrowing capacity under the company's revolving credit facility and the equity issuance subsequent to the end of the quarter, the company had approximately $340-million , which will allow the company to achieve its targets for the growth of its consumer loans portfolio through to the third quarter 2020.
Dividend
The board of directors has approved a quarterly dividend of 22.5 cents per share, payable on Jan. 11, 2019 , to the holders of common shares of record as at the close of business on Dec. 28, 2018 .
Deal Addict
Apr 27, 2015
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What the Hell happened today to Alcanna Inc (CLIQ)? Why it's 10% down? Cannot find any news
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Jan 28, 2007
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Took a position in LNR once it dipped below $50 ... will wait till it pops back up some.
I'd rather be outdoors camping, kayaking, and mountain biking ...
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TSX oil sector gonna be rocked today... already down $1 pre-market... TRP especially with the new judgement to halt pipeline.
...zzz...zzz...zzz...

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Deal Guru
Jun 26, 2011
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GTA
cn_habs wrote: I was wondering the same. Maybe the credit risk has skyrocketed? I haven't found any sell-side downgrades.
Nice to see a company with competent management react swiftly. Already announced s NCIB to begin next week. If people want to dump the share price on low volume the company will just buy em back. A+
Deal Addict
Jan 28, 2007
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Added more CPD for son's RDSP
I'd rather be outdoors camping, kayaking, and mountain biking ...
Deal Guru
Jun 26, 2011
13562 posts
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Bought PONY.to to play the recent surge in natgas prices plus winter coming fast. Risk vs reward seems good here

Edit: Buying ROXG as well...then that'll be it for CAD till I sell something.
Deal Fanatic
Feb 4, 2015
6067 posts
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Canada, Eh!!
Finally some positive news... Mr. Contrarian has spoken.

https://www.marketwatch.com/story/denni ... yptr=yahoo
.......
July 13, 2017 to October 25, 2018: BOC raised rates 5 times and MCAP raised its prime rate next day each time.

2020: BOC dropped rates 3 times and MCAP waited and waited to drop its prime rate to include all 3 drops.
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Aug 4, 2014
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romeocanada wrote: got FB Jan 20 out of money calls
What strike price did you pick if you don’t mind me asking? :) Just getting into options myself, so curious how others choose their trades.. :)
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Jul 27, 2017
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freilona wrote: Sold 2 VTI contracts (June 21 2019 $143 Call) for $6.60 (my limit order from yesterday got executed this morning :)) Bought 26 shares of IEMG for $49.27. Both in RRSP, a neat rebalancing trick I came up with and decided to try (and won't mind if VTI shares get called near its all time high :))
based on your option trades, I was wondering 'why & why now' since you have been holding these positions for so long, are bullish, both provide you with dividend income, as well as have sizable positions in both did you suddenly start trading options?

did you see options as extra money & what if any risk is involved in covered calls?

why on November 6 - when you did the trade selling covered calls did you pick the long June $143 strike price and not out of the money or in the money strikes?

what does "rebalancing trick" mean, I don't understand this?
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Aug 4, 2014
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porticoman wrote: why on November 6 - when you did the trade selling covered calls
Funny you should ask.. :) As I wrote to you on November 4th, after looking at a bunch of call spread examples that I didn’t quite understand:

“Sorry, @porticoman , not interested in buying some stocks that I do not know (and never planned to own) just to experiment with options :) Besides, I see that my understanding is still very stock buyer like.. sigh

I’ve entered a couple paper trades for C and VIX, but spent the morning looking at selling covered calls for VTI (our largest long-term holding): https://www.bogleheads.org/forum/viewtopic.php?t=191956 (and a few other threads, with mixed opinions)

So I have 389 shares of VTI with average cost of $114.5 and my husband 870 shares at $115. Both are DRIP-ing 1-4 shares per quarter in our respective RRSPs. VTI closed $139.56 on Friday, and its 52 high was $151.84. I’d be ok to sell covered calls on it in my RRSP (1-3 contracts until I have 400+ shares) and keep my husband’s (in case it jumps up and my shares get called - he’ll still have his, and I’ll try to repurchase mine lower)

I looked at the calls available at Questrade. There’s none listed for 2020 and 2021 at the moment, and I only see Last prices (would have to check Bid, Ask and Change during trading hours I guess) I’d like to follow Option Alpha’s “tip” to use Delta ~0.3 to determine a strike price (which means a stock or an ETF has ~70% chance of staying under that price)

I looked at the calls from now to June 19 of next year (the latest available) The 2nd and last options look the most attractive to me:

Date | Strike | Delta | Price (Last)
12/21/18 144 0.28 $2
03/15/19 147 0.28 $3.5
06/21/19 149 0.3 $2.98
06/21/19 150 0.28 $3.25

The real prices tomorrow might be different of course, but here’s my current “level”: I’m ok “making” a thousand dollars now by selling 3 contracts for $3+ and potentially having to sell my shares for $147 in March or $150 in June (unless I repurchase the contracts when the share price is above $145?) I might post this question on the forum as you’re too advanced for such “baby steps”.. but if you could reply with a simple yay or nay - I’ll really appreciate it =)”
[Why] did you pick the long June $143 strike price and not out of the money or in the money strikes?
You replied:

“VTI at $139.56 last, doing the june 2019 at the money option, is semi long,
the option premium at the money will decay with time even if the stock
price goes up. And yes holding the stock close to expiry you can buy it
back cheaper relative to an increased stock price because the option price
has decayed even though the stock has increased

June 2019 $140 call on the bid is $7.30 on the ask $8.60”

I picked $143 as “something in between” (it wasn’t atm at the time) I entered the order a night before November 6th - thinking that I’m not really bearish and don’t believe that the markets will tank post-election, but I’ll never learn unless I start trying :)
what does "rebalancing trick" mean, I don't understand this?
Depending on the size of the ETF positions, selling covered calls on outperforming one (instead of selling its shares) to buy more shares of underperforming one (VTI and IEMG in my case, but could be SPY and bonds ETF I think - didn’t look at it yet :) If the shares get called away, repurchasing them in proper proportions afterwards (I’m with Questrade, so ETF buys are free) Basically, I wanted to see if i can incorporate covered calls in our passive indexing strategy :)

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