With the arrival of the funds from my old 401(k), I established several new positions in an effort to get the money working for me right away. Here is an analysis of the first position – stock symbol CAT.
CAT
12/29/2011 Bought 100 shares at average share price $89.53 (total $8,953.00)
12/29/2011 Sold 1 CAT Jan 2012 92.50 at $1.60 (total $151.74)
Net Profit:
1) Options Income: = $151.74
2) Dividend Income: Ex-date is 1/18, but it looks like the position will be assigned early, $46.00
3) Capital Appreciation if assigned at $92.20: $279.00
12/29/2011 Bought 100 shares at average share price $89.53 (total $8,953.00)
12/29/2011 Sold 1 CAT Jan 2012 92.50 at $1.60 (total $151.74)
Net Profit:
1) Options Income: = $151.74
2) Dividend Income: Ex-date is 1/18, but it looks like the position will be assigned early, $46.00
3) Capital Appreciation if assigned at $92.20: $279.00
Total Net Profit if Assigned and dividend collected: $151.74 + $46 + $279.00 = $476.74
Absolute Return on Investment: ($476.74/$8,953.00) = 5.32%
Annualized Return if Assigned (21 days): 5.32*(365/21) = 92.55%
Yesterday's closing price was $94.17, so the Jan 92.50 is currently in the money (ITM).
I have several more new position posts to put up in the next few days.
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