Seems like a fun place to play with Options in the TSX I ran into a little money past month and started rounding out my portfolio and shopping for other fun ideas and what do you know, this mighty Canadian bluechip has fallen to an interesting price again.
You could buy it straight out right, and it likely jumps back to 165-170 or more by year end and you get a 8-15%+ return and like 1% dividend in that time.
Or check out the Put Options:
In the last 10 minutes of the day I went with a short term outlook and sold a single July 21st $155 Put for 2.60...
If the price stays below $155 I just bought 100 shares for $153.275 each after fees, which is below the current closing price. I lose if the price continues to fall and goes below that purchase price obviously, but I don't think there is that much downside risk at this point and I'm comfortable with a purchase in this area, also I did this using margin which means I didn't need to spend $15,000 to get the shares, I just put about $4700 of my margin on hold until the purchase happens, if it happens.
If the Price breaks out above $155, I don't get the shares, but I got paid $248.76 for 2 weeks of my time and that hold on my margin which was free...
I guess it's kinda odd but I'm actually hoping that I get assigned the shares.
I was looking at anouther fun idea with a little more risk but seemed very compelling...
The March 15th 2024 with a $170 strike price has a 17.25 premium bid which would make for an interesting time depending on your goals... That would be a collection of $1713.76 premium for a time frame of 8 months or less or I get the shares at $153.62 at that time. The fun with this one is if the price jumps back up in a shorter time frame, I can buy back the Put at a much lower premium and pocket the difference. But the reason I like March 15th is because it is after late January when CNR will up the dividend payout likely 10%+, which means it's very likely that the shares will trade above $170 maybe close to $180+, so for tying up $4700 I get paid $1700... This one seems like a great risk reward also because of the flexibility that even if assigned the shares because the price maybe only reaches like $165, I've still gained on the value side on assignment, and it cost me nothing in interest on the margin and if anything the premium has paid down some margin use (therefore lowered interest costs) on other transactions.
Something to think about if your of the same mind as myself that current value should really be around 165-170 and that after the January dividend announcement I'd be betting we see 175-180...