Royal Bank Of Canada Hits Record Earnings – No Oil Woes Yet – Aug 26 2015

One of the widest held stocks in Canada is Royal Bank Of Canada. The trading symbol is RY. The bank trades under the same symbol in both Canada and the United States. I only trade it in Canada which have better option increments. Unfortunately it also has poor option volumes in Canada.

Nonetheless I have enjoyed spectacular gains in Royal Bank of Canada Stock and I see nothing that would advise me to be extremely cautious with this stock even in the present decline as I use a mix of stock and options to profit and protect my Royal Bank Of Canada Stock trades. Today they announced record earnings and a dividend increase. Let’s review the stock and then look at some trade ideas to take advantage of the present volatility as the Toronto Stock Exchange stays under selling pressure and has turned negative again this morning.

Royal Bank of Canada Stock One Year Chart – Stock In Downtrend

Looking at the one year chart you can see that the stock is in a definite downtrend. The collapse of oil prices has impacted all Canadian banks as investors and analysts fret that they will be impacted by the decline of oil revenues, possible bankruptcies within the oil industry itself along with a variety of other factors. After reaching a high of $83.87 in November 2014, the stock on Aug 24 hit $68.05 in the panic selling. You can see looking at volume that while this presently has been a period of above average selling, there have been other periods just as pronounced with selling pressure over the past year. Since February however, Royal Bank Of Canada stock has not seen extended periods of above average selling until just August.

The Accumulation-Distribution Indicator shows though that based on the year, Royal Bank Of Canada Stock is still seeing high accumulation.

Royal Bank Stock One Year Chart - stock in a definite downtrend

Royal Bank Of Canada Stock One Year Chart – stock in a definite downtrend

Royal Bank Of Canada Stock In Correction Mode

Presently, the stock is down 18.8% from its all-time high which it set back in late November. This places the stock well into correction territory and possibly could be considered in a bear market. The stock is heavily shorted and has been for more than 6 months.

Dividend Raised

Royal Bank of Canada announced record earnings and it raising its dividend for yet another year. The dividend will be raised to 79 cents a share per quarter a three percent increase for the year. This brings the annual dividend to $3.16 which based on today’s trading at $71.00 is a 4.4% return. A very decent dividend from a very strong bank. Selling covered calls, even leap covered calls, can increase that dividend dramatically.

Covered Call Power

For example………….the rest of this strategy discussion article is for Canada Members. As I trade Royal Bank of Canada stock only on Toronto and in Canadian currency this article is posted to the Canada Members section.

Royal Bank of Canada Stock Record Earnings

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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.