In light of the additional deposit in the Rescue My IRA account, I'm shooting for holding 12 to 15 positionsat any given time. At the current time, that means the average value of the holdings should be about $8,000. Along with all the new positions I established I looked at the holdings to see if there might be some to add on to - CSX seemed like one with potential so I added 200 more shares. I also sold to open two more of the 22.50 Feb 2012 calls on the new shares.
Here's the analysis of the position:
CSX
Original 200 shares: $4,348.82
Second 200 shares: $4,396.44
Total basis: $8,745.26
Average share price: $21.86
Prior Call Premiums: $73.97
1st lot 22.50 Feb 2012: $126.49
2nd lot 22.50 Feb 2012: $136.48
Total Call Premiums: $336.94
Dividends Received: $24.00
Estimated Total Returns if Assigned:
Total Call Premiums: $336.94
Dividends: $24.00
Estimated Capital Gains at $22.50 per share: $236.74
Total Absolute Return: $597.68
Total Return, Percentage: 13.74%
Estimated Annualized Total Return (held 120 days): 41.80%
Most recent closing price per share: $22.76, so these calls are in the money (ITM).
Interesting blog...Q for you: Do you only ever sell covered calls to collect premium, or do you also sell puts for income?
ReplyDeleteGLGT!
James, thanks for the comment. At the moment, I'm only using covered calls with the goal of generating income from premiums, dividends and stock gains. Somewhere down the road I will probably do CSPs also, but the account isn't yet authorized for those trades.
Delete