Following are the activity from the previous month:
a) Closed the following longs: Sold all of Johnson & Johsnson (JNJ) and all of Nucor Steel (NUE) for slight losses - total portfolio impact was around 0.15%. The former stake was established on 8/3/2012 and the latter stake was first purchased on 01/21/2011. The NUE stake was called away as our Oct 40 2012 calls expired in the money.
b) Increased/Added the following longs: Added one-third more to our holdings in Vringo (VRNG) on 10/9/2012 at $4.91 and two-third more to our holdings in Nokia (NOK) on 09/19/2012 at $2.68. Also, our QSII stake was increased by 50% as our Sep 30 2012 short puts expired in the money and so was put to us.
c) Long Calls: None.
d) Long Puts: None.
e) Shorts: None.
f) Short Calls: Nucor Steel (NUE Oct 2012 40) calls expired in the money as the stock closed well above $40 at expiry. Our long position was called away as a result. The transaction had a minor portfolio impact of just 0.07%.
g) Short Puts: Added Intel (INTC Apr 2013 20) at $1 - the cash coverage requirement was slightly less than 2% of portfolio.
h) Synthetic Longs: None.
i) Synthetic Shorts: None.
The cash position in our portfolio has increased to over 35% as we liquidated sizable positions in JNJ and NUE during the month with no corresponding additions.
Long/Short Portfolio Update:
The overall portfolio has unrealized gains of around 5.33%.
2012 Transactions Summary:
Excluding dividends, we have a realized gain of 7.70% in the portfolio YTD.
Option Position Updates:
Short Puts: ABB Ltd (ABB Dec 2012 15 @ 0.65), Nucor (NUE Jan 2013 34 @ 2.20), Marvell Technology (MRVL Jan 2013 10 @ 0.89), and Intel Corporation (INTC Apr 2013 20 @ 1.00). The short puts together have a cash coverage requirement of about 27% of our cash position.
Short Calls: Clearwire (CLWR Jan 2013 1.5 at 0.35) and SPDR Gold Trust ETF (GLD Jan 2013 167 at 6.9). The short calls exposure is ~4% of the portfolio.
Long Calls: None.
Synthetic Longs: JC Penney (JCP Jan 2014 25) and Corning (GLW Jan 2014 12) with a net exposure of ~4% of portfolio and ~9% of cash.
Watch List: Assured Guaranty Limited (AGO), Air Products & Chemicals (APD), Bemis Company (BMS), Cigna Corporation (CI), NTT Docomo (DCM), Diageo (DEO), DaVita (DVA), Dream Works Animation (DWA), Emerson Electric (EMR), Forest Laboratories (FRX), General Motors (GM), Jefferies Group (JEF), 3M Company (MMM), Nestle (NSRGY), PepsiCo (PEP), Polypore International Inc. (PPO), State Auto Financial (STFC), Teva Pharmaceuticals (TEVA), Vivendi (VIVHY), and Whirlpool (WHR).