Quality Names - Outstanding Potential Entry Points

Market Shadows' Virtual Put Writing Portfolio made a few additions this morning.

We took advanatge of the pullback in Costco Wholesale (COST) by selling 1 contract of the Jan. 2016, $95 strike plus 1 contract for the same date @ a $100 strike. Premiums received were $6.30 and $7.80 respectively.

COST quote with put prices

 

Each would commit us to buying shares, if eventually exercised,  below Costco's absolute bottom print since late in 2012. 

COST   1-year (daily)

 

The second new name was in food service wholesaler Sysco Corporation (SYY). Sysco is already number one in its field. Their announced purchase agreement for US Foods should give them a huge boost in both sales and margins once it is finalized.

The stock surged higher on the news, in December, but has fallen back enough to make today's option sale very attractive.

We sold 2 contracts of the Jan. 2016, $35 puts @ $4.05 per share. That reduces our 'if exercised' price point to $30.95. That is just 40-cents above SYY's 2013 nadir. At that price Sysco would yield 3.75%.

SYY quote with put prices

SYY  1-year (daily)

All three trades will now be followed in our 

Virtual Put Writing Portfolio .

 

None.

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