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.