Monday, April 16, 2012

New Position: ADM

After my position in T was assigned earlier this month on its ex-date, I searched for a new position to replace it with.  After considering a couple of stocks, I selected ADM – there was a good post on it on Seeking Alpha recently, and it is one of a number of stocks that are on my watch list.  While I was en route to Dallas last week I pulled the trigger on this triple play opportunity. 
Here are the details of the new ADM position:

4/9/2012 Bought 300 shares at a total of $9,246.88
4/9/2012 Sold 3 ADM Jun 2012 32 at a total of $202.24

Net Profit:

1) Options Income:  = $202.24
2) Dividend Income: $52.50 (Mid-May ex-date)
3) Capital Appreciation if assigned at $32.00:  $335.94

Total Net Profit if Assigned and dividend collected:  $202.24 + $52.50 + $335.94 = $590.68
Absolute Return on Investment: ($5,90.68/$9,246.88) = 6.39%
Annualized Return if Assigned (60 days):  6.39%*(365/60) = 38.86%
On the date of purchase last week, ADM’s closing price was out of the money (OTM).

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