Sunday, March 4, 2012

Adding to Position: GLW

Last month I changed my reserve policy in the Rescue My IRA account, revising it down from 20% of the account value to 10% - that left me with around $4,000 uninvested last week.  I wanted to invest in shares that would give me a chance to sell a couple of covered calls, and that led me to a position I already had established – GLW, where I already had 400 shares. 

Because I have 13 positions on the books and my goal is to manage between 12 and 15, it was okay by my trading plan to add to an existing position.  I added 300 shares last week and now hold 700.  I also closed out the 14 Mar 2012 contract I had on the old position, and wrote a 14 May 2012 on the whole position – I received a total of $215.24 for the seven contracts.

As with some of my other long-in-the-tooth positions, I have done several roll-outs on the GLW position:

15 Jan 2012
14 Feb 2012
14 Mar 2012
14 May 2012

Here’s the rest of the story, based on this new May contract.  As always, these calculations are net of commissions and fees in my Scottrade account.


Total option premiums:  $368.22
Total dividend payments:  $45.00
Total stock gain at $14.00:  $540.12
Total, absolute gain on the position:  $953.34
Total, absolute return percentage ($953.34/$9,241.88):  10.32%
Annualized total return percentage (held 180 days):  20.92%

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