Meanwhile, there's been a lot of talk lately about dividend-paying stocks. I thought I would give a trader's view on this subject. One UK stock that stands out is National Grid: It's dividend currently pays 6.4%, according to the Sunday Telegraph. Here's the chart:
After the rally from the August low, I'm not particularly keen to buy this stock, but it looks to be supported at 620. And with a robust dividend, I could be tempted to average in. The August low, by the way, was caused by concerns over supply disruptions in the States during Hurricane Irene. But now NG is behaving like a typical, boring, utility stock.
And just out today, National Grid has reopened its inflation-linked bond, looking to raise an extra £10 million after the strong response to its initial issue last month. The bond, which offers a return of 1.25 per cent on top of the Retail Price Index (RPI), originally attracted over 10,000 investors and raised £260 million. So if bonds are for you, then get your skates on and phone your financial adviser.
TRADE IDEAS
My OEX trade from 14 Sep has performed nicely. Remember I suggested 'buying' this spread for a credit of 11.60 (Confused? Please see the chapter in my book on the Condor). Last week this spread could fairly easily have been closed at 6 ticks, giving a profit of 5 ticks, or $500 times how many times you did it. With today's sell-off, and the OEX at appx 544.88, the condor can be closed for an extra tick, for a profit of $600. If you haven't closed this trade, then I suggest that you do so immediately. The Oct contracts expire on Friday, and the market will be quite volatile this week given earnings reports and the ongoing EU problem. Today's sell-off is a gift, and as I always say, TAKE A GIFT.
Meanwhile, gold is languishing at appx 1670. I'm still looking to short it at 1750-1800. Patience is a trader's best friend.
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