If you (moi) jump a day too soon on the oil equities you can always dust off a prime beneficiary of the activity in the futures.
From our October 13 post "Trade Idea: A Derivative, Derivative, Derivative":
We very rarely tout individual issues and when we do they are usually megacaps but how can one resist this little Mad Hatter's Tea Party?The stock closed that long ago Monday at $79.01.
Plus we like Cup-and-handle set-ups to shade the odds a bit closer toward your favor. CME closed at $81.61 on Friday.
A financial exchange is a derivative of Keynes' animal spirits while an exchange that trades futures, and options on those futures, is one more step removed from reality while, and I have to be careful here because I'm getting that wilderness-of-mirrors vertigo feeling, establishing the position by way of an option should be yet another step away from the day to day....
$89.06 last, down 3 cents and a big thank you to Dragonfly Capital who spotted the opportunity.
For the record: The ideas we put on the blog are those we judge most likely to occur, not the highest return or even the highest risk-adjusted return.
From Barron's Income Investing:
Shares of CME Group Inc. (CME) have edged higher Thursday morning after the options and futures exchange declared a $2.00 annual variable dividend late Wednesday, payable Jan. 13, 2015. Sandler O’Neill analysts said the dividend comes in slightly above the high end of their expected range, noting that annualizing the current quarterly cash dividend of $0.47 and then adding the $2.00 variable dividend implies annual dividends of $3.88 per share, equating to a 4.4% yield based on yesterday’s close.
Sandler ups its price target by $4 to $98 and reiterates its buy rating. More from Sandler’s Richard Repetto and his team:The target for the original recommendation was $89.75 so we're closing but the stock is one to keep in mind as this type of cup-and-handle formation can have 2, 3, or even 4 upward impulses after the breakout.
The payment of the annual variable special dividend will reduce cash and equivalents by $673 million. Based on our forecast for cash at December 31 of $1,344 million, after payment of the special dividend, CME will have estimated cash balances of approximately $671 million, slightly below its minimum cash target of $700 million….
Based on our outlook for cash earnings, we had estimated that CME had the capacity to pay a variable dividend of up to $1.92 per share, with a likely range of $1.32- $1.92. CME has stated minimum cash needs are $700 million, but in prior years it has never approached that cash floor – this year is the first time the company has been comfortable doing so....MORE
Here's the current chart via FinViz:
