PVX

[Tirebldr]

PVX is running on good volume today

[Tirebldr]

Got a novice question please  .
   I bought into PVX @ 10.65, and PGH  @ 22.61. Friday both of them started turning around and heading down. Should I be concerned at this point or are these normal profit taking do you think?

[daldrich]

Hey Tirebldr,
  I see you bought into several of the stocks I refered to.
  I think your conciderations are twofold.  First, if you are in for the dividends then the  price fluctuations are secondary, but two, the stock will fluctuate at dividend payout dates and according to the price of oil.  I think the company valuations are based on oil @ something like $25 a barrel so the basis is pretty good but the recommended buy under on PVX is $10 and PGH $22 so I think they will correct down in the future but probably not until crude drops to under $50.  So watch the price of crude to decide if you want to sell out and maybe buy in at a lower price.  Meanwhile, you are getting dividends to lower your cost over time.
Wish you the best

[Samantha Stephens]

The $10 NOV call options on this traded at $.05 ... so I picked 10 contracts for $50 bucks. With all the taxation issues lately, I'm hoping this one was unnecessarily beaten way down and that this one runs up quickly ... ya ... like in the next 3 days.

They just added 5 and 7.50 options to the mix. I'm assuming that means the market makers think it can trade way lower. That's why I'm making such a dinky bet on a quick upside.

$50 bucks ... that's a pizza dinner bet.
Samantha   

[Samantha Stephens]

I'm still long the NOV $10 calls, but I'm keeping my eye on the $10 puts now ... they're selling for $.05 now that the stock is up over $10. And the stock is up 7% on the day. Might be a cheep shot on a pull back.

[Samantha Stephens]

Since I spent so little on these options, I'm staying in the trade even though the stock is having some problems holding the highs of the day. At the moment it is staying above $10 ... so that might become a round number support ... I hope. This might turn out to be a bad decision. I'm still keeping an eye on the puts, but expanding my scope to watch both the Nov and Dec puts.

If it can close above $10.02, then I'm hoping that today's candle will prove to be a bullish engulfing candle that covers the last 2 days. Only tomorrow will tell...

In addition to gas/oil, I'm keeping my eye on the other Canadian trusts to get a tell on the direction of sentiment for those trusts.

Keep in mind that if you get into November options ... they expire this Friday at the close...
Not a lot of time to be right.

I was up 400% this afternoon ... maybe I should have taken my 5 pizzas and ran. 
Samantha

[Samantha Stephens]

PVX gaped open to 10.70 and has fallen since the nat gas report. Probably should have sold the options when the stock hit 10.70... So ... now I figure I need a trading plan. If PVX can't stay above yesterday's close @ 10.30, then I'll sell the options I bought. I'd like to be out of this trade today, considering they expire tomorrow at the close. Time is getting tight!
Samantha

[Samantha Stephens]

Lots of resistance at 10.60. Before this becomes an exercise in greed ... I'm putting in a sell order for my options @.55. Not a lot of time to push the issue. 

[Samantha Stephens]

Still not filled. Keeping the 10.30 level as my stop. If it goes below, I'll cancel my order and sell at the bid. Or at least that's the "plan"... 

[Samantha Stephens]

OK ... I couldn't hack it anymore. I sold at the bid of $.30. There were a million times today to have sold with a better return. But, with the drop in Oil/gas and such, I think I'm fighting an uphill battle. And, I don't want to hold into tomorrow. I'm now hoping that the low commodity prices take it's toll on the stock and the December options start looking good. 

[Samantha Stephens]

This is a great article about the tax situation on the trusts in canada. It helped me sort it all out. One other thing I wanted to point out is that when you BUY call options, you don't get any dividends. Even though you don't get the dividend, you want to keep the dividend dates and amounts in mind if you're trying to get in and out, because it can affect the stock price and has the potential for taking your in the money option out of the money.

http://advisor.investopedia.com/news/06/A_Taxing_Affair_ERF_PWI_HTE_PGH_PVX_BTE.aspx?ad=IA_Blog_111606_3

[Samantha Stephens]

This is a longshot trade. I'm going to put in an order to buy PVX Dec 10 puts for a nickel. It probably won't fill. If it doesn't fill today, I'll reevaluate next week. BUT ... if today's option expiration can tweak the volatility on that option down to 20 or temporarily spike the stock, then I might get filled. The bid ask is currently .10/.20 and the lowest fill was at $.15 . Why don't I just bite the bullet and go for the .20 ... I'm cheap.

Here's my reasoning for the trade:
*Gas/oil are down big and yet PVX is holding up for some reason. Resistance seems to be around $10.70 with support at 10.30.
*If I get filled, then I can hope all the bad news about the Canadian Trusts isn't baked in yet and the stock falls over the next month.
*When they pay their monthly dividend, that may help the stock go down.
*If the stock hangs around $10 but doesn't crash, I will essentially be buying a protective stop, which is mentally helpful for me if I want to trade the stock.
*If it falls below $10, I can try to leg into as straddle and see if I can buy a cheep $10 call. The call will come in handy if people figure out soon that these trusts don't have to pay the tax change until 2011 ...

Downside: It's an option, so I can loose all of my investment. So I'm not betting the ranch on this.

[Samantha Stephens]

Ok .. so I sold my options a day early and my trading plan below never executed. I'll rethink it.