One of my favorite Canadian Bank Stocks is Bank of Nova Scotia Stock. It trades on New York and Toronto under the symbol BNS. I have been in and out of Bank of Nova Scotia Stock for years. Once you have been trading within Bank Of Nova Scotia Stock you begin to see a pattern that can not only provide exceptional profits on the Put Selling side, but some excellent opportunities for trading the stock. All my Put Selling and stock trades on Bank Of Nova Scotia Stock are on the Toronto Stock Exchange in Canadian dollars as the option increments are better and volume reasonable although not on a scale with most US Stocks.
Since the start of March the Canadian Bank Stocks have been under selling pressure and Bank Of Nova Scotia Stock has fallen fairly steeply, especially over the past several days providing some excellent Put Selling opportunities.
I am already holding a few naked puts, but on Monday April 8, with the stock under $57 for the second day, I stepped in and bought 500 shares of Bank Of Nova Scotia Stock at $56.50 and I sold 10 naked puts of the 18MAY13 $56 naked put for .75 cents. Put Selling the May $56 naked put places my break-even on Bank Of Nova Scotia Stock at $55.25. Let’s look at the Bank Of Nova Scotia Stock chart for the past year to see why I found this trade so compelling.
Bank Of Nova Scotia Stock 1Year Stock Chart
Going back to April 2012 the $55.00 level was one of the best trades I did all of last year in my retirement portfolio. I continually sold the $55 covered calls and kept rolling them repeatedly forward. Holding the covered calls along with Bank Of Nova Scotia Stock returned 24% last year when I add in the dividend which this year is $2.40. At $55 the dividend returns 4.3%. Using the Building Wealth Covered Calls Strategy has provided exceptional returns in Bank Of Nova Scotia Stock.
Bank Of Nova Scotia One Year Chart
Bank Of Nova Scotia Stock 3 Month Chart
The past 3 months saw Bank Of Nova Scotia Stock set a new all time high and then it pulled back and has now wiped out the entire year’s gain. The fear among investors is that the Canadian mortgage market will collapse per the US mortgage market and that consumers will be pulling back on debt. I have serious doubts that either will occur. As well Bank Of Nova Scotia is a global bank, not just tied to the Canadian mortgage market.
Bank Of Nova Scotia Stock 3 month daily chart
Earnings per share is above the industry average with the most recent EPS at $5.27 which was an increase of 13.25% over the previous year. Bank Of Nova Scotia is growing its revenues and market share faster than the industry average. This is the second year in a row that revenue growth is expanding rapidly. Bank Of Nova Scotia has a ROE of 19.06%.
On April 8, a strong buy recommendation came from another Canadian Bank, TD Bank. Standards and Poor last week gave Bank Of Nova Scotia Stock a 4 star rating and raised their guidance on the stock to $64.00 Of the 16 analysts following Bank Of Nova Scotia Stock, 4 now rate it a strong buy and 8 rate it a buy. Revenue growth has been very strong for 5 years and recently Bank Of Nova Scotia purchased ING Direct which added almost 2 million accounts and $30 billion of deposits.
Support For Put Selling Bank Of Nova Scotia Stock
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