FDG - $41.85 Fording Canadian Coal Trust ** Stop $39.25 **
Oops! I posted the entry point on FDG for a dip to $125 last week and neglected to take into account the 3:1 split due on the 13th. The $125 entry price would have equated to $41.66 and that was hit at the open on the 14th. Since the entry and the option was listed mistakenly and I am going to list the entry as $41.66 and the option as the March-$45. (March-135 recommended divided by 3) Several readers emailed me that they were dividing by 3 and taking the entry so I am going to eat the busted entry. I am going to show it with an average cost of $2.50 with the high at $2.80 and low of $2.05 on the opening spike.
Fortunately, after a day of consolidating just under $40 the coal fired rocket took off again on Friday and sent the stock back to close at $41.85. As long as the natural gas spigot is turned down to low the coal burners will be hot and hungry. With the potential for a gas shortage this winter it appears many utilities are storing up as much coal as they can handle in advance of the first cold snap.
Fording Canadian Coal Trust (the Trust) is an open-ended mutual fund trust. The Trust does not carry on any active business. Distributions to Unitholders are facilitated by the Trust's investment in Fording Inc. The Trust holds all of the issued and outstanding Fording Common Shares, Fording Preferred Shares and Fording Subordinated Notes and does not own any other material assets. Through Fording Inc., the Trust holds a 62%-interest, declining to 61%, effective April 1, 2005, and to 60%, effective April 1, 2006, in the Elk Valley Coal Partnership and a 100%-interest in NYCO. The Trust uses the cash it receives from its investment in Fording Inc. to make quarterly cash distributions to its Unitholders. During the year ended December 31, 2004, the Elk Valley Coal Partnership accounted for 96% of the Trust's revenues and NYCO accounted for the balance.
MARCH 2006 $45 CALL FDG-CI @ $2.50
Entry $41.66 (9/14)