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Research In Motion  
About The Company
Market Cap 32.6B
Revenue (FYR) $15B
EPS (TTM) $5.85
Shares Out. 521.8M
Book Value $13.64
P/E 10.9x
Price/Sales (FYR) 1.8x
P/Cash Flow (TTM) 8.7x

Research In Motion Ltd is a profitable Communications Equipment company that trades on the TSX and the NASDAQ. Research In Motion Limited (RIM) is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for access to information, including e-mail, phone, short message service (SMS), Internet and intranet-based applications. RIM's portfolio of products, services and embedded technologies are used by organizations worldwide and include the BlackBerry wireless solution, the RIM Wireless Handheld product line, software development tools and software. RIM operates offices in North America, Europe and Asia Pacific. 

 

 

 
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Nothing presented is financial advice, trading advice or recommendations. Everything presented is the author's ideas only. The author accepts no liability for its use including errors and omissions. You alone are solely responsible for your own investing and trading. There are considerable risks involved in implementing any investment strategies and losses can be large. Trade at your own risk.

 
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  RESEARCH IN MOTION (RIM) - 2009
ONGOING EVALUATION & TRADE - YEAR ONE
This trade is taking place on the TSX. (RIMM - NASDAQ) The same trade could be done on the NASDAQ.
This is a trade using the 10-20-30 moving averages strategy (read the 10-20-30 trading strategy paper here) for timing of my option trades. Nothing on my site is financial advice or recommendations.

GOAL: Average 15% a year in income
OBJECTIVE: I am using the 10-20-30 moving averages strategy to assist in deciding when to sell puts and calls and buy to close them. If at any time I am holding shares, it will be for short periods only. The focus is on selling option positions for income to meet the goal.

SUMMATION: My chart with each transaction, shows how I am interpreting this rule and applying it to assist my decision making process to time my trades. I am following this strategy to see if I can use the 10-20-30 moving averages strategy consistently for profits. There is no fool proof way to invest in stocks. I am aware that I cannot just blindly follow a technical indicator but must look at numerous factors.

By writing up each of my trades I can build a history to re-examine each trade to determine what factors I am considering that are working and which factors are not. I will keep my quantities to within 5 contracts for each position taken. I am also doing a smaller number of contracts to see if even with a small capital I could use this strategy.

I am also aware that the strike position taken has a large impact on not just income, but also on risk. I am always focused on risk and plan to stay out of the money with my strikes as much as possible.

**Notes on the percent return - I am not breaking this trade down by month or day or year. Instead I am taking each position and calculating the simple percent return on the trade position over the period of the trade. Percent returns in brackets indicate percent given back when the position is bought to close (BTC).
BTC = Buy To Close    STO = Sell To Open

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

 

 

YEAR 1: 2009 - Trade Commenced Jun 2 2009
Goal for 2009: 8.75% (7 months)
Strategy: Sell Naked Puts Until Assigned
15% a year = 1.25% a month or 8.75% for 7 months.
 
Capital In Use At End Of 2009 142,007.00
Income Earned in 2009 (7 months) 9,070.50
Return On Capital in 2009 (7 months) 6.4%
   

 

 

 

 

 

 

TRADE COMMENCED June 2 2009
ONGOING STRATEGY - 10-20-30 Moving Averages Strategy

 

Capital
Committed
JUNE 2 2009: The 10 day SMA has crossed the 30 day and now the 20 day EMA. I have sold 5 naked puts Jun 80 for $1.50.

Jun 2 09 89.37 STO Sold 5 Naked Puts Jun 80 @ 1.50 1.87 0   13.25 0 0 736.75 736.75 40,000.00
JUNE 11 2009: The stock has hit over 94.00 during the day. My Put is at .45 big .51 ask. I bought back my put for .51 cents. Why cover here you may ask. The gain is over 60% in just a few days. Look at the chart below.

 
JUNE 11 2009: Here is RIM from Jan 2 2008 until Jun 11 2009. This stock is extremely volatile. During the rush to get into stocks it was pushed beyond normal valuation as were most stocks. There is reasonable support for the stock at just above 80.00, but resistance is anywhere above 90.00. I have many friends who bought into this stock at and above 100.00. They are waiting to get out. The concept here for me is to make a profit. A gain of more than 60% in a few days is great for my needs.

Jun 11 09 94.24 BTC Bought back 5 Naked Puts Jun 80 @ .51 (.64) 0   13.25 0 0 (268.25) 468.50 0.00
JUNE 15 2009: Even though the stock has pulled back in the last few days, the 10 day SMA is far above the 20 and 30 day EMA. I am however going to sell 5 Jun 100 naked Calls  @ 1.91. There is just 4 days left to expiration.

Jun 15 09 90.90 STO Sold 5 Naked Calls Jun 100 @ 1.91 1.9     13.25     941.75 1410.25 50,000
Jun 19 09 84.10 Expiration Day Jun 100 Calls Expired                 0.00
JUNE 24 2009: The 10 day has crossed the 20 day and is touching the 30 day EMA. The stock has bounced up a little in the last couple of days. A good day to do nothing.

 
JUL 6 2009: The 10 day is starting to flatten out. The 20 day EMA has cross the 30 day EMA. Still doing nothing, but getting ready to sell Naked Puts or possibly buy Calls.

 
JUL 9 2009: The 10 day EMA has slowed its descent while the 20 day EMA is falling toward the 80 dollar mark. The 30 day has only moved a dollar or so. Still doing nothing.

 
JUL 14 2009: Good thing I waited for confirmation. Stock is now lower and the 30 day EMA is moving lower. The 20 day EMA is down to 80.00 and now the 10 day EMA is below 80.00. Still doing nothing. Should have bought some puts back on Jul 6. If you look at the chart above you can see that the 10-20-30 rule indicated this stock was moving lower. I though prefer shorting the options rather than buying them.

 
JUL 20 2009: If you are a bit of a risk taker you could consider buying a call or selling a put, but there is no confirmation yet but everything is turning back up. I am waiting though.

 
JUL 23 2009: 10 day almost touching the 20 day and still moving higher. Stock is trending sideways though trying to find a direction.

 
JUL 28 2009: 10 day SMA has crossed 20 and 30 DAY EMA confirming an uptrend. Could consider buying a call. But I sold 5 Naked Puts Aug 76 @ .84 instead. Note I am always staying OTM both on the put and call side. Yes the premiums are higher for ATM or closer OTM but this is a volatile stock. I want to turn a profit and not have to worry about owning or buying shares.

Jul 28 09 83.55 STO Sold 5 Naked Puts Aug 76 @ .84 1.10 0   13.25 0 0 406.75 1817.00 38,000.00
JUL 31 2009: The 10 day SMA is flattening out. Was it a wrong call. The stock is trending sideways. Perhaps there will not be a breakout. My put has gone no where. I will wait a bit longer. As I sold August, each day means a bit more evaporation of the premium in my favor.

 
AUG 4 2009: The stock is moving higher. 10 day is starting to turn higher as well.

 
AUG 11 2009: Uh Oh are we in for more selling? The 10 day SMA is turning down. To get out of the Naked Put - Aug 76 - will cost me .84 cents. I think I will hang on. If I get assigned I don't mind $76.00. It's on the low side of the stock price.

 
AUG 14 2009: The 10 day SMA has crossed the 20 day SMA and the 30 day EMA is moving lower. The stock though has a bit of a bounce. Is it time to get out? My Aug 76 Put is at .41.  The 30 day EMA though is not moving lower as is the 20 day EMA. Just 1 week to go. Let's see if I get assigned.

 
AUG 17 2009: Stock at $78.10. 10 day SMA still turning lower as is the stock but the 10 day has still not crossed the 30 day EMA. The 30 day EMA is also not falling lower. Just 2 days left.

 
AUG 19 2009: The 10 Day SMA has crossed the 20 and 30 day EMA. This is expiration day. My Aug $76.00 puts expired.
 I sold Naked Calls. 5 Contracts Sep 90 @ 1.27

Aug 19 09 80.33 Expiration Day Aug 76 Puts Expired                 0.00
Aug 19 09 80.45 STO Sold 5 Naked Calls Sep 90 @ 1.27 1.41     13.25     621.75 2438.75 45,000.00
AUG 21 2009: The stock has moved higher and the 10 day SMA has turned flat. What do you think? Sell some Naked Puts and buy back my call? I think I will wait a bit longer.

 
AUG 26 2009: The 10 day is moving up and the 30 day EMA has crossed the 20 day EMA. The stock though appears flat. Still holding my Naked Calls. Remember they are Sep $90.00

 
AUG 31 2009: Here we are at the end of Aug and the 10 day has just crossed the 20 day, but the stock is still flat. My Sep 90.00 Calls are trading at .46 cents to buy them back. I'll wait.

 
SEP 3 2009: The stock is up, but the 10 day SMA has just finally touched the 30 day but not crossed it. The 20 day EMA is turning up.

 
SEP 4 2009: 10 day SMA refuses to cross the 30 day EMA and the 20 day EMA is flattening out. Stock is up slightly.

 
SEP 8 2009: I finally got my confirmation. Time to sell 5 Naked Puts and buy back my Sep 90 Call for .50.

The problem is there is no premium left in September for OTM worth the risk. I will wait a day or so.

(Next day - Sep 9 - I sell 5 Oct 76 @ 1.99)

Sep 08 09 85.60 BTC Bought back 5 Naked Calls Sep 90 @ .50 (.55)     13.25     (263.25) 2175.50 0.00
Sep 09 09 84.35 STO Sold 5 Naked Puts Oct 76 @ 1.99 2.61     13.25     981.75 3157.25 38,000.00
SEP 11 2009: 20 day EMA crosses the 30 day EMA. Stock continues its climb.

 
SEP 15 2009: Stock continues climbing as does the 10 day SMA and 20 day EMA. Now the 30 day EMA is moving higher.

 
SEP 23 2009: Wow - we are up to a high of 94 during the day. So here we are again. All the indicators point up and up and the 30 day EMA is getting up to 85.00. My Oct 76 put is trading for .50 cents. I buy the puts to close the trade. What a great trade this has been. The Oct Call $105.00 is at 1.26 bid. I might wait a day or so and sell that call. I doubt we see 100.00 on the stock.

Sep 23 09 94.00 BTC Bought back 5 Naked Puts Oct 76 @ .50 (.65)     13.25     (263.25) 2894.00 0.00
SEP 24 2009: The stock fell $4.00 today. I really think the chance of this stock getting to 105.00 is limited. Not to out think the 10-20-30 rule but I sold the Oct 105.00 for 1.12. I have enough profit that if I am wrong I will buy back the calls and sell some puts. I think I am right after reviewing the yearly chart. Sometimes yo have to look beyond the 10-20-30 rule and do what your instincts tell you. Plus I have a lot of friends who want to sell at $100.00 and get out. I really think $100.00 is going to be tough for this stock to reach and hold.

Sep 24 09 90.16 STO Sold 5 Naked Calls Oct 105.00 @ 1.21 1.15     13.25     591.75 3485.75 52,500.00
SEP 25 2009: What a difference a day can make. We are down to 75.04. Didn't even get a chance to buy a put. Even the 10-20-30 rule could not warn me. Poor earnings report and a couple of downgrades and here is what can happen. This is why I prefer corporations that pay a dividend and have slow but steady earnings. No surprises is what I like. But then the volatility is much lower and premiums are nothing like those we have made on RIM. Still though this is way over dong it. I will get a chance to sell naked puts soon I bet.

 
SEP 29 2009: A small bounce, but nothing really. The 10-20-30 rule is a bit out of sorts right now, as it tries to re-establish itself.

 
SEP 30 2009: Now we get the 10-20-30 rule back working. The 10 day SMA is crossing the 20 day EMA and touches the 30 day EMA - Time to sell a Naked Call? Too early I think after such a dramatic fall.

 
OCT 2 2009: The confirmation is now solid. The problem is I have already sold my Naked Calls and there are just no decent premiums unless I want to risk a bounce back up in the stock. I think a move higher is in the cards. Instead my Oct 105.00 Naked Calls are trading for .15 cents. I will buy them back. Why would I do this. It closes the trade, the profit is enormous and I can concentrate on putting my capital to work for the next trade on RIM. Do I think they will expire worthless. Absolutely! But I like to close the trade and for .15 cents -why not.

Oct 02 09 70.83 BTC Bought back 5 Naked calls Oct 105 @ .15 (.14)     13.25     88.25 3397.50 0.00
OCT 7 2009: The 10 day SMA has fallen below 75.00 and the 20 and 30 day are down as well. The problem I see is that we could go back to at least 80.00 in the short term as the selloff was definitely overdone. I will wait a few days I think before deciding whether or not to sell naked calls. With today's move the stock closed at 71.49 which is a 1.46% increase.

 
OCT 9 2009: The 10-2030 rule shows a stock very much under pressure. I have added a few other technical indicators. The 50 day EMA and the 20 day WMA. The 10 day has broken through all these levels. However the Oscillator shows an oversold condition. As well the Support/Resistance show 80 day support still at 70.13 so even in the recent sell off the stock did not break support. So what would be best to do at this stage. As I am unsure the direction, I will sell an OTM Naked Call and Put . As I am unconcerned long term on this stock I would be willing to own this stock at either of these levels. For those investors who are concerned, I would suggest purchasing a farther OTM Call and Put for protection. (Create bull/bear spreads). For a put I will pick 64.00 which is 6 dollars below the 80 day support. For the call I will choose the 85.00 strike which I think is far enough OTM that it will not recover to that level by Nov expiry.

Oct 09 09 72.98 STO Sold 5 Naked Calls Nov 85 @ .66 .77     13.25     316.75 3714.25 42,500.00
Oct 09 09 72.98 STO Sold 5 Naked Puts Nov 64 @ .69 1.07     13.25     331.75 4046.00 74,500.00
OCT 28 2009: The 10-20-30 continues to show a stock in serious decline. Obviously I should have listened to what the 10-20-30 rule was telling me. My naked calls are doing very well but my $64.00 put is under pressure. I have today bought back the Naked Puts for Nov 64 and rolled them to Dec 60.00 and I have sold an additional 5 Naked Calls for Dec 80.00.
 

 

Oct 28 09 65.65 STO Sold 5 Naked Calls Dec 80 @ .93 1.16     13.25     451.75 4497.75 114,500.00
Oct28 09 65.65 BTC Bought back 5 Naked Puts Nov 64 @ 1.84 (2.8)     13.25     (933.25) 3564.50 82,500.00
Oct 28 09 65.65 STO Sold 5 Naked Puts Dec 60 @ 2.07 1.72     13.25     1021.75 4586.25 112,500.00
NOV 2 2009: Today  Citigroup issuing a sell recommendation on RIM, the stock fell dramatically. Yet by the close of the day the support held at 60.00. The 10-20-30 is telling me that that stock is still in decline.
The move I should make is to continue to have sold naked calls but never have sold the naked puts. We will see if RIM can hold onto support here. If not I will probably roll my naked puts lower or go out further to bring in more premium.
 

Nov 2 09 59.14 STO Sold 5 Naked Calls Dec 68 @ 1.75 2.57     13.25     861.75 5448.00 146,500.00
NOV 12 2009: Rim has moved up significantly but the 10 day still shows stock is not recovering but moving sideways. This could mean the new trend is sideways. My Dec 68 calls are on the verge of being ITM. I have added the 5 day SMA to give us a better idea of the short tern trend and we can see that it is definitely up with the 5 day touching the 20 day. I am holding the Dec 68 Calls. Should the stock hold above 69.00 I will purchase 500 shares, so my Dec 68 calls will be covered.
 

Nov 20 09 63.66 Expiry: 5 Naked Calls Nov 85 expired                 104,000.00
NOV 24 2009: The 10 day SMA crossed the 20 day and is now turning back down. The trend remains sideways to down. Resistance for 15 day is at 67.78 and support remains at 60.00, right where our Dec short put is.
For this stock to recover in the next 4 weeks to 80.00 will require a significant change. I will watch and BTC the Dec 80 when the premium falls below .15 cents or so. However as the indicators still point down, I want to gather more premium and I have sold 5 Jan 76 strike at .85. 

 

Nov 24 09 62.98 STO 5 Naked Calls Jan 76 @ .85 1.14     13.25     411.75 5859.75 142,000.00
DEC 9 2009: With the news that RIM has made a deal to begin selling in Chiba, the stock has picked up. The 5 day SMA has touched the 20 and 30 day EMA and the 10 day SMA has also turned up. My Dec 60 puts I believe will expire. I have sold 5 Puts for Jan again at 60.00. which is just below 80 day support. I am still holding the Dec 68 calls, Dec 80 Calls and the Jan 76 Calls. I have placed an order to buy 500 shares at 69.00 if the stock reaches that level. This will turn my Dec 68 calls into covered calls. The stock has not hit 70.00 since Oct 27.
 

Dec 9 09 67.03 STO 5 Naked Puts Jan 60 @ 1.65 2.75     13.25     811.75 6671.50 172,000.00
DEC 10 2009: The 10 day has now reached the 20 and 30 day EMA. I changed my order from purchasing at 69 to purchasing at 68. I then bought to close my Dec 68 calls and rolled to Jan 68 for a net credit of about 3.80 after commissions. I then closed my Dec 60 puts and shorted 5 Jan 62 Puts for an additional 1.75. I will not hold these to expiry but plan to hold them only while the stock moves higher or sideways. This is purely an intrinsic value play.

 

Dec 10 09 68.00 Bought 500 Shares @ 68.00
COMMENTS: THE CAPITAL COMMITTED changed by just 7.00 as the capital of 34000 was already committed to the DEC 68 calls when they were sold as naked calls on Nov 2 2009
  500 68.01 7.00 (34007.00) (34007.00)     172,007.00
Dec 10 09 68.20 BTC 5 Calls Dec 68 @ 2.95
COMMENTS: Again, the capital committed does not change as these are now covered calls
(4.33) 500 68.01 13.25   (34007.00) (1488.25) 5183.25 172,007.00
Dec 10 09 69.25 STO 5 Covered Calls Jan 68 @ 5.05
COMMENTS: Again capital committed does not change as these are now covered calls
7.42 500 68.01 13.25   (34007.00) 2511.75 7695.00 172,007.00
Dec 10 09 69.25 BTC 5 Puts Dec 60 @ .36 (.60) 500 68.01 13.25   (34007.00) (193.25) 7501.75 142,007.00
Dec 10 09 69.30 STO 5 Puts Jan 62 @ 1.75 2.82 500 68.01 13.25   (34007.00) 861.75 8363.50 173,007.00
DEC 18 2009: With the earnings news beating expectations the stock has come back to life. In the opening minutes of today's trading, the stock jumped 13% allowing me to close the Jan 60 and 62 Puts. To date we are up a little over 21% in 6 months on RIM. Today is also expiry for December. With the jump up in the stock price and the best volume since September's news of poorer than expected earnings, I will wait before making my next trade. I need the stock to pullback a little and then look again at the January or February puts. The Dec 80 calls will expire worthless today.

 

Dec 18 09 75.88 BTC 5 Puts Jan 62 @ .25 (.40) 500 68.01 13.25   (34007.00) (138.25) 8225.25 142,007.00
Dec 18 09 75.88 BTC 5 Puts Jan 60 @ .17 (.28) 500 68.01 13.25   (34007.00) (98.25) 8127.00 112,007.00
Dec 18 09 73.96 Expiry: 5 Naked Calls Dec 80 Expired   500 68.01     (34007.00)     72,007.00
Dec 22 09 71.31 STO 5 Puts Feb 60 @ .74 1.23 500 68.01 13.25   (34007.00) 356.75 8483.75 102,007.00
Dec 22 09 71.31 STO 5 Calls Feb 80 @ 1.20 1.50 500 68.01 13.25   (34007.00) 586.75 9070.50 142,007.00
END OF 2009 - INCOME - $9070.50 for 7 months  While the return would appeaar to be just 6.3% it is actually considerably higher as the percentage I show is a simple calculation of taking the income and dividing it by the amount of capital that is in use at the year end. Actually the return is higher based on the amount of capital in use at varying times. So far the strategy does appear to have merit. Next year should be quite interesting.

SUMMARY OF STRATEGY: In my opinion the 10-20-30 moving averages strategy was very successful this year, however I am not sure it is necessary to take advantage of every movement to sell more naked option positions. Next year I will work towards having fewer option trades open at the same time.
RIM TRADES BY YEARS
VIEW RIM-2011 TRADES
VIEW RIM-2010 TRADES
VIEW RIM-2009 TRADES

 

 

Disclaimer: There are considerable risks involved in all investment strategies. 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 or presented are financial advice, trading advice or recommendations. Fullyinformed.com is a private website. Everything presented and discussed are the author's ideas and opinions only.
By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not use this site. The author of fullyinformed.com assumes no liability for topics and ideas discussed, errors and omissions, ads and their content and external links. Any corporate insignia used are registered trademarks of their respective company or corporation and are being used for identification purposes only. All material copyrighted by FullyInformed.com. Reproduction in whole or in part prohibited. Copyright 2008

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