Tuesday, November 29, 2011

Completing Adjustments: AA, CSX, DIS, GE

After taking advantage of last week’s market slide to complete a series of buy backs, yesterday the market had a bounce on good news about prospective retail activity during the holiday season this year.  So I went back in to complete adjustments on those old positions, which I will summarize in the post today.
 The four positions, in alphabetical order, are:  AA, CSX, DIS, and GE. Here are the covered call transaction histories for each of these positions.  Note that I am rounding the amounts here, and I am not calculating yields for this post in the interest of brevity.
I have four round lots that I am working with in this position, and this is the first roll-out on AA.
·         STO (4) 11 Dec 2011:  $124.00
·         BTC 11 Dec 2011: ($52.00)
·         STO 11 Jan 2012: $100.00
·         Total AA premiums:  $172.00
I am working with 2 lots in this position, which I have now rolled-out twice. These shares went ex-dividend on 11/28, so a dividend payment of $28.00 or so will soon be making its way to the account!
·         STO (2) 22.50 Nov 2011: $39.00
·         BTC 22.50 Nov 2011: ($16.00)
·         STO 22.50 Dec 2011: $96.00
·         BTC 22.50 Dec 2011: ($46.00)
·         STO 22.50 Feb 2011:  $136.00
·         Total CSX Premiums:  $209.00
I am working with 2 lots on the DIS position, and it is also the second time I have rolled-out the position.  In past years, the stock has gone ex-dividend (an annual payment) in approximately mid-December; based on the payment history for last year the dividend will be about $80.00, assuming I am not assigned early on the Jan 36. Also, this one has that lesson learned story: the first adjustment was completed with a net debit – I don’t allow that to happen any longer.
·         STO (2) 36 Nov 2011:  $81.00
·         BTC 36 Nov 2011:  ($131.00)
·         STO 37 Dec 2011:  $155.00
·         BTC 37 Dec 2011:  ($44.00)
·         STO 36 Jan 2012:  $176.00
·         Total DIS Premiums:  $237.00
I have 4 lots in this position, they were bought in two transactions.  Like DIS, this stock is anticipated to go ex-dividend during December, so there will be a yield of about $60.00 to the position.  This was a roll-out and roll-up since the 17.50 contract is not available anymore.  Because I sold June 2012 contracts, as long as the position is not assigned, I will likely collect dividends in March and June as well.
·         STO (4) 17.50 Jan 2012:  $137.00
·         BTC 17.50 Jan 2012:  ($72.00)
·         STO 18 Jun 2012:  $152.00
·         Total GE Premiums:  $217.00
With these adjustments completed, I only have two positions left for the December expiration:  two IP contracts 29 Dec 2011 and two CMCSA 22 Dec 2011. I will probably let these two ride until expiry. 
Tomorrow I will close the month with a summary of activities and some yield calculations.


  1. excellent trading! buy low, sell high and only rolling for net credit...pro style :)

  2. I have a friend who calls it "making money the old fashioned way" - lol!