NAE.un oil trust on Toronto

[selkirk]

I have slowly been adding to my oil/gas holdings, for the most part just been selling puts, at far lower prices, and collecting premiums.

on some have bought some and sold covered calls just above I purchased them, ie.

bought TLM 14.90 cdn. sold 15 july call for 1.45.
will take 10% in just over 3 months, however TLM is sitting at 16 so should have waited.


one purchase that I am slighly under water on is

NAL oil and gas trust, trades on Toronto under NAE.un

bought it for 9.30 cdn. last week though now trades for 9.16 cdn.

pays monthly div that works out to roughly 11.79% yield, 9 cents a month.

production should grow and is split between oil and gas..the balance sheeet is good and the div is safe.

note: if oil falls 20-25% the div will not safe....
if it rallys div could be raised slightly, that is one of the risks.

will follow this and see how I do on this trade, should have bought it for 9.20, so not off to a good start.

if it hits 10 will sell half my positon, and my stop loss is 20%.

should state that most of these divs, on these oil gas trust will go away in 2011, as only reits will be covered in Canada.

so do not buy a cdn. oil gas trust because of the div, you should like it as a company, and some will convert early to a regualar corporate structure.

thanks
selkirk

 

[selkirk]

just a quick update I traded around the position. made one good trade and one bad.

the stock was rallying from 9.10 cdn. to 9.60 and decided to take some off the table and get back in closer to 9.30.

so sold most of the position at 9.60 for a .30 gain.

BAD TRADE
they then announced an issue at $9. so instead of waiting to buy it at 8.90-9.10 thought the rally might continue on the next day.

bought it early at 9.20. now at 9. terrible trade.
will get the .09 cent cdn. div for this month.

hope to sell in the 9.75-10 cdn. range.

thanks
selkirk

 

[selkirk]

sold 75% of my position of nae.un for 9.64. probably means it rallies past 10.

will try to buy back position in low 9s.

thank
selkirk

 

[selkirk]

well NAE.un hit 10 shortly after I sold at 9.64 cdn.
it actually hit 10.46 in a week....great timing...lol.

anyways sold my remaning 25% at 10.10. should have had a much better gain.

anyways have an order in to buy back my position at 9.25. it actually went down .22 to 9.67 and hit a low of 9.30. so just missed it....

will have the order in for the rest of the month.

will continue this thread...will show how not to trade a stock....

thanks
selkirk

 

[selkirk]

have the position again, actually since last post went as low as 9.07.

oil got knocked down and when it broke 70 was not a surprise to see it get dragged down.

today nae.un rebounded over 9.60. anyways will sell at 9.65, bought at 9.25.

if not will collect the monthly div.

thanks
selkirk

 

[selkirk]

okay NAE.un has been sold at 9.65. actullay sold it slightly higher at 9.85 yesterday, it went lower below 9, then rallied.

anyways for record puposes will follow the same as my sell target of 9.65. bought at 9.25.

will use 1000 shares by the way, though I am trading more than this. this helps make it easier to follow.

also got one .09 monthly div.
next update will provide a breakdown of gains, and trading costs.

will buy it back if it hits 9.10. in the next two weeks.

thanks
selkirk

 

[DOGS THAT BARK]

Always enjoy your updates on this thread Kirk

Wasn't on purpose--but somehow bout 70% of stocks I have left are related to energy or natural resources.

 

[selkirk]

DTB my percentage of energy and mining, ect. resource group is probably at 35-40%.

have covered calls on most of my holdings, had many options expire this past Friday, except one, bad BMO covered call.

believe most oil stocks are in a trading range, have been bearish for natural gas stocks and oil probably moves first.

still natural gas has a chance to go on a run, as the hurricane season approaches, this will not effect price long term but in a month or two. may add to a few positons.

ag stocks are holding up well, but still see them flat to down slightly going forward. only own AGU with covered calls, may also write uncovered calls for oct. far out of the money.

thanks
selkirk