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Strategies & Market Trends : Option Strategies
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To: Cliff0rd who wrote (1766)9/1/2016 12:22:06 PM
From: Jim P.  Read Replies (1) of 2591
 
I find it therapeutic to cut losses once I am sure I have made a mistake in my initial reason for speculating in a stock. Took a 1/2 % loss on my portfolio with the mistake.
I am also using the option premium in SLCA to try to make money. Company is a frack sand provider among other businesses and is in excellent financial shape. They recently bought a company called Sandbox which has a storage and delivery product that has competitive advantages silo style sand delivery. Advantages are decreased time to frac a well and lowers silica dust at the wells site. This dust level is subject to recent EPA regulations and the Sandbox seems to be a great solution.
The amount of sand used in well stimulation is increasing on a per well, per foot basis so that surviving companies will be the first leg in the industry which experience upward pricing pressure.
I own stock with covered calls and cash covered puts.
The premiums have been rich and I think the longer term trajectory is up.
I have September and a few December options. Strikes of $34, $40, $42 and $44.
I will keep selling calls and puts until I am sure the stock is ahead of fundamentals. Very early in the cycle of ramping up drilling but well past the bottom of the sand cycle. I think this will take several years to play out.
Jim



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