CLOROX 2009 Trades / Income From Selling Naked Puts, Covered Calls

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You are here: INDEX > US-STOCKS > CLOROX 2009 TRADES / INCO...

CLOROX
About The Company
2009: Market Capitalization $8.2B Revenue (FYR) $5.5B Total Debt $3.15B EPS $3.81 P/E Ratio 15.5x Shares Outstanding 139.3 M Avg. Daily Share Volume (Last 10 Days) 1.8 M Dividend: $2.00 Clorox Co is a profitable Personal & Household Prods. company that trades on the NYSE. I am sure you will recognize the products from this company - Brita, Armor All, STP, Glad, Burt's Bees, Hidden Valley, KC Masterpiece, Kingsford charcoal, Green Works, and of course Clorox Bleach, among many others. The Company sells its products primarily through mass merchandisers, grocery stores and other retail outlets. It primarily sells these products in North America, while having a smaller presence outside our continent. It is working to grow its brands beyond our borders and has increased its revenue and its dividend each year. This is a large consumer products corporation with an attractive dividend. Over the next few years Clorox believes it will grow its revenue between 3 to 5 percent annually. This could be higher if its brands become more common place outside North America. Presently they have 10 number one brands out of the top 16 consumer brands. Clorox is very strong when it comes to its brand names and that could be the key to my success as well. The biggest problem Clorox faces is that many of its brands are related to the commodities which they are derived from. This has meant an increase in actual cost to produce by about 600 million dollars annually. The company believes this cost will decrease by about 100 million annually starting in 2010 going forward. They have managed to increase the cost of their products aside from Glad, by close to 50% and the consumer has not balked at these price increases. This bodes well for Clorox brands. Their profit margin is around 9.85% which is reasonable for a consumer products company. Their debt is 3.15 billion and declining gradually. Return on assets is again good at 13.96% but book value is poor at $2.00 per share outstanding. The chart below shows that the price for the stock however remains range bound, which is okay for my strategy as I want low volatility in the stock in order to have some degree of comfort for both my puts and calls.

CLOROX (CLX) - 2009
Clorox Stock Symbol - CLX
ONGOING EVALUATION & TRADE Year 1
Strategy: Selling Naked Puts Until Assigned
This will be a core holding. Options are thinly traded and premiums are reasonable but not terrific. However my strategy with this stock is selling naked puts at the money and in the money to follow the stock movements. The stock has an excellent trading range and is widely held by institutions. The current strategy is selling naked puts until I either accept assignment OR get assigned shares. Then I will turn to covered calls and collect the dividend. Should the stock fall too low making covered call selling impractical I will add to my stock position through selling naked puts to lower my overall cost.

CLOROX TRADES BY YEARS
VIEW CLOROX-2011 TRADES
VIEW CLOROX-2010 TRADES
VIEW CLOROX-2009 TRADES

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YEAR 1: 2009 - Trade Commenced March 2009
Goal for 2009: 10% (10 months)
Strategy: Sell Naked Puts Until Assigned

Capital In Use At End Of 2009 32,500.00

Income Earned in 2009 (10 months) 5740.00

Return On Capital in 2009 (10 months) 17.66%

Should you find my strategy and ongoing evaluation of this trade of value I hope you will consider a tip for the time I spend detailing out this trade. I have set up a Paypal account for those who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice. They are just my ideas and opinions. Investing is risky and losses can be large. Trade at your own risk. Read the terms of use

TRADE COMMENCED March 23 2009
ONGOING STRATEGY - SELLING NAKED PUTS UNTIL ASSIGNED

Mar 23 09 49.91 STO 5 Naked Puts Apr 50 @ 1.15 2.3 13.25 561.75 561.75

March 23 2009 - Here is a three year chart on Clorox. The trading pattern is quite evident. Even in the credit crisis the stock only fell to a low of $45.71.

Apr 3 09 53.10 STO 1 Naked Puts Apr 55 @ 2.15 (Trying to pick up 100 shares at $55.00) 3.9 8.25 206.75 768.50

Apr 17 09 55.90 Expiry: 5 Naked Puts Apr 50 expired 1 NP Apr 55 Expired

Apr 20 09 55.35 STO 3 Naked Puts May 55 @ .90 1.6 10.75 259.25 1027.75

Apr 20 09 55.35 STO 2 Naked Puts Jun 60 @ 5.55 9.25 9.50 1100.50 2128.25

May 15 09 51.11 Expiry: 3 May 55 Puts Assigned 300 47.97 20.00 16520.00 16520.00

May 19 09 52.80 STO 3 Covered Calls Jul 55 @ .70 1.2 10.75 199.25 2327.50

Jun 19 09 56.07 Expiry: 2 Jun 60 Puts Assigned 500 52.42 20.00 12020.00 28540.00

Jun 22 09 56.02 STO 2 Covered Calls Aug 60 @ .85 1.4

Jun 22 09 56.02 STO 1 Naked Put Jul 55 @ 1.10 2.0 8.25 101.75 2429.25

Jul 17 09 58.09 Expiry: 3 Jul 55 CC exercised / 1 Jul 55 Put Expired 200 20.00 (16480.00) 12060.00 (40.00) 2389.25

Jul 20 09 57.90 STO 4 NP Aug 55 @ .70 1.2 12.00 268.00 2657.25

Jul 23 09 Dividend 200 X .50 100.00 2757.25

Aug 21 09 58.69 Expiry: 4 NP Aug 55 Expired

Aug 24 09 58.35 STO 4 NP Sep 55 @ .60 1.0 12.00 228.00 2985.25

Aug 24 09 58.35 STO 2 CC Oct 60 @ 1.20 2.0 200 9.50 230.50 3215.75

Sep 18 09 57.93 Expiry: 4 NP Sep 55 Expired

Sep 29 09 58.71 STO 3 Naked Puts Oct 60 @ 2.05 3.4 200 41.70 10.75 12060.00 12060.00 604.25 3820.00

Sep 29 09 58.71 STO 3 Naked Puts Nov 55 @ .95 1.7 10.75 274.25 4094.25

Oct 13 09 58.30 Buy Back 3 Naked Puts Oct 60 @ 1.85 (3.0) 10.75 (565.75) 3528.50

Oct 13 09 58.30 STO 3 Naked Puts Nov 60 @ 3.13 5.2 10.75 928.25 4456.75

Oct 16 09 58.17 Expiry: 2 CC Oct 60 expired

Oct 19 09 58.20 STO 2 CC Dec 60 @ 1.15 1.9 9.50 220.50 4677.25

Oct 26 09 Dividend 200 X .50 100.00 4777.25

Nov 9 09 60.98 Buy Back (BTC) 3 naked Puts Nov 55 @ .05 (0.09) 10.75 (25.75) 4751.50

Nov 9 09 60.98 STO 3 Naked Puts Jan 55 @ .55 1.0 0 10.75 154.25 4905.75

Nov 20 09 59.89 Expiry: BTC 3 Naked Puts Nov 60 @ .30 (0.50) 200 10.75 12060.00 12060.00 (100.75) 4805.00

Nov 20 09 59.90 STO 3 Naked Puts Dec 60 @ 1.55 2.5 10.75 454.25 5259.25

Dec 18 09 61.40 Expiry: 3 Dec 60 Puts Expired / 2 Dec 60 Calls Exercised 0 20.00 (11980.00) 0.00 (80.00) 5179.25

Dec 21 09 61.70 STO 3 Naked Puts Feb 60 @ 1.20 2.0 10.75 349.25 5528.50

Dec 30 09 61.58 BTC 3 Jan 55 Puts @ .05 (0.09) 10.75 (25.75) 5502.75

Dec 31 09 61.10 STO 2 Naked Puts Apr 55 @ .60 1.0 9.50 110.50 5613.25

Dec 31 09 61.10 STO 1 Naked Put Feb 60 @ 1.35 2.2 8.25 126.75 5740.00

End of 2009 - $5740.00 - 17.66%

CLOROX TRADES BY YEARS
VIEW CLOROX-2011 TRADES
VIEW CLOROX-2010 TRADES
VIEW CLOROX-2009 TRADES

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