Today presented an unusually rare opportunity.
NGL got swamped nearly beyond recognition---diving nearly $5/unit.
With 50-odd cents of gain in each ALDW unit, I elected to let go of a thousand units of AL:DW to finance a lot of NGL at $16.90 and lower. Factor in the 39 cent distribution coming in a couple of weeks and the NGL price is an incredible bargain in my opinion.
And after a bunch of trades I chose to drop another 500 units of ALDW largely to take a bite out of my margin debt which had climbed above $70,000. So it's now down safely beneath $70,000.
I'm sitting on 24,500 units of ALDW and as of today I'm the proud owner of 9,000 units of NGL with a cost basis of $14.08. This will soon be dropping down to $13.69 ion the next couple of weeks.
I had a gain of nearly 60 cents in each ALDW unit as my cost basis is $8.67 and I was selling today at $9.35. And I'll soon be able to add 39 cents of guaranteed income thanks to adding more NGL with a declared distribution awaiting us.
ALDW may pay a distribution but I know better than to count on it. The NGL payout is for real and it's solid.
This has been really exciting as it involves a lot of thought. There are few guarantees in life but this bit of processing looks pretty comfy to me.
Now for something really interesting: Being as I see a market-wide correlation existing between NGL and ALDW, I'm betting that ALDW will rise disproportionately in the coming days before it goes ex-distribution. This is why I didn't sell 500 more than I did as there may be a better opportunity to unload that 500 units of ALDW but at a considerably higher price.
We shall see, said the blind man to the idiot. Being as I was formerly blind and the wife insists I'm sometimes the idiot, I'd say all bases are covered. lol
