Continuing with my recent shift toward collared positions, I began another today in CSX Corporation one of the nation's largest rail transportation companies. This position was started due to a few factors. Firstly, rail shipping will be one of the areas which rebounds once the economy rebounds, and as such this position is more of a long term play, though I wouldnt be disappointed if it got called away. I chose CSX as opposed to one of the other rail companies due to its high relative revenue growth, and the fact that it has lagged its peers in terms of a bounce off the bottom, trading between 25 and 30 for about a month and a half. The new purchase metrics are below:
5/27/2009 -- Bought 100 CSX @ 29.715
5/27/2009 -- Sold To Open 1 CSX June $30 Call @ 1.28
5/27/2009 -- Bought To Open 1 CSX June $26 Put @ 0.45
The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2971.50
Max Downside Risk: 9.99%
Downside Coverage: 2.79%
Possible Max Upside: 3.86%
Annualized Max Upside: 58.71%
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