Like many of my generational colleagues, the baby boomers, I've found that my best intentions about saving for retirement aren't always meeting the mark. In 2011, I took some old 401(k) accounts and combined them into a self-directed IRA with Scottrade, and established a strategy of using covered calls to stabilize and enhance my returns. Rescue My IRA chronicles the progress of my IRA rescue using this approach.
Monday, April 9, 2012
T Position Called Away Early
While I was traveling last week, my position of 300 shares of T was called away before the April 5 ex-date. I’ve held these shares long enough that I have collected a quarterly dividend before, so I welcomed the capital gain I earned.
Now, I should make a note that the date April 5 has a significance, historically – it is the anniversary of the La Belle Discotheque bombing in Berlin. I was stationed in Berlin at the time, from October 1981 until April 1986. The bombing took place the night before I left.
I can remember a conversation or two of friends who were planning to head over to that disco. We’d been warned that something was afoot and to keep our eyes peeled for some kind of terrorist activity targeting Americans. Looking back, I’d ascribe those warnings to diplomatic traffic going through the Libyan embassy in East Berlin – and I think I’ve read that somewhere before as well.
In the morning, there were suddenly new security procedures for just about everything, from getting back on base (I was stationed at Tempelhof Central Airport) after breakfast, to bag check at Tegel Airport later that day. I wouldn’t find out about the bombing though until I was back stateside, receiving my discharge from my six year USAF enlistment.
The T position met my goal of 12% annualized return. Here is the record on the position, as usual, net of fees and commissions:
1/6/2012 Bought 300 shares at an average price of $30.41, total position basis $9,124
4/10/2012 Sold on assignment 300 shares at $9,282.79, average share price $30.94
Total stock gain: $158.94
STO 31 Feb 2012 total $64.24
BTC 31 Feb 2012 total ($34.75)
STO 31 Apr 2012 total $49.24
Total options income: $78.73
A dividend of $.66 per share was collected in January, and another was due on 4/5/2012, but the position was assigned before the second dividend was collected.
1) Stock gains: $158.94
2) Options income: $78.73
3) Dividend Income: $132.00
Total Net Profit after Assignment: $158.94 + $78.73 + $132.00 = $369.67
Absolute Return on Investment: ($369.67/$9,124) = 4.05%
Annualized Return (105 days): 4.05%*(365/105) = 14.08%