Wednesday, May 9, 2012

New Position: URS

Once I made the decision to pull the trigger on the ACM sale, I knew I needed to get that money working again using my trading plan.  So as I looked for a new stock, my first thoughts were to look within the same industry to see if there were competitors who fit my model.  I found one in URS – and although I don’t know if I will stay with the position for very long (I’m questioning whether I want so much money in the professional services sector), at least for now it seems to be a viable position that will help me meet my goals after the dismal performance of ACM. 
While there is potential for a hat trick in my URS position, my first contract is for a May expiry, so the stock may be called away before its expected ex-dividend date.    
Here are the details:

5/7/2012 Bought 400 shares at a total of $15,827.00, basis $39.57
5/7/2012 Sold 4 May 2012 40 at a total of $287.99

Net Profit:

1) Options Income:  = $287.99
2) Dividend Income: $0 (Early June ex-date, if I end up with a roll-out I will update the calculation)
3) Capital Appreciation if assigned at $40:  $155.82

Total Net Profit if Assigned at 40 in May:  $287.99 + $0 + $155.82 = $443.81
Absolute Return on Investment: ($443.81/$15,827.00) = 2.80%
Annualized Return if Assigned (20 days):  2.80%*(365/20) = 34.18%
On the date of the trade, URS’s price was out of the money (OTM).

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