Friday, December 12, 2014

Friday's Finalist: UDR

UDR Inc. (UDR), a real-estate investment trust based in Colorado, is the lone survivor of the early rounds of analysis of trading signals from Thursday's markets.  (See "Friday's Prospects".)

It confirmed  its bull signal by continuing to trade above its 20-day price channel today, although it has failed to set a higher high compared to Thursday. It shows as an uptrend on the three-year daily chart and normal would be a candidate for a closer look.

However, I'm rejecting it as a trade because it lacks sufficient liquidity in its options to support construction of a leveraged, hedged position, the sort of trade I'm interested in these days.

The January options grid has only eight strike prices each for calls and puts, only three strikes have open interest, and it is in the double digits.

It's shares or nothing for this puppy.

The stock pays a 3.3% dividend annualized at today's prices and so might make a reasonable trade under my longer-term rules, structured as shares. However, my allocation for that sort of trade is filled.

I plan no further analysis of UDR today.

-- Tim Bovee, Portland, Oregon, Dec. 12, 2014


My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules can be read here.

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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