By Paul Price of Market Shadows
Market Shadows doesn’t try to time the market. We look to enter trades at prices that make sense.
Logistics provider C. H. Robinson (CHRW) is a high-quality company that is finishing out a rare, slightly down earnings year. The stock has already pulled back from a 2011 peak of $81.00 to just $57.32. It has rarely yielded as much as today’s 2.43%.
The shares have shown solid technical support at $51 – $52 since the start of 2010. The company is debt-free.
We sold one Jan. 2015 $60 put today for $8.20 per share. Our maximum profit would be to keep the $820 premium if the option expires worthless. The worst-case risk is to be forced to buy 100 CHRW shares at a net cost of $60 (the strike price) less $8.20 (the put premium) = $51.80 per share.
That’s a price we could live with and one that hasn’t persisted for long over the most recent four years.
The trade has been added to our Virtual Put Selling Portfolio .
A tip of the hat to Market Shadows’ subscriber Tom E. who brought this stock to my attention.
