Friday, June 8, 2012
More Adjustments: ITW, NOC, and SPLS
Today’s post concludes the one I started yesterday concerning some recent roll-out positions. I covered the GE, HAL, and WAG shares yesterday so today will be about ITW, NOC and SPLS.
As I mentioned yesterday, the proceeds from these six roll-outs were enough to add another lot to my CSX position. I will add a post on that one next week.
And of course, there are still three weeks left to June – I’m sure I’ll have a few more trades to report by the end of the month.
Here’s the analysis of the three positions.
The ITW position consists of 200 shares. My basis is around $56 per share, and the stock is trading near there. I am selling 57.50 strikes and rolling them monthly.
Total option premiums: $554.45
Total dividend payments (including the forecast June ex-dividend): $144.00
Total stock gain at $57.50: $208.89
Total, absolute gain on the position: $907.34
Total, absolute return percentage ($907.34/$11,274.00): 8.05%
Annualized total return percentage (held approx 150 days): 19.58%
This 200 share position has held its own in the current market. I was satisfied with the results of my initial analysis, but had a few reservations about making a choice in the defense sector. Live and learn.
Total option premiums: $589.79
Total dividend payments (counting May ex-date): $210.00
Total stock gain at $60.00: -$3.36
Total, absolute gain on the position: $796.35
Total, absolute return percentage ($796.35/$11,986.25): 6.64%
Annualized total return percentage (held 120 days): 20.21%
I have a 500 share position in SPLS. It has a four-star rating with S&P, so I thought it was a good opportunity back in February or so when I bought it, and I don’t mind owning it now. It’s just that I can’t profitably write 17 strikes anymore. So I’ve decided to compromise that objective and write in-the-money calls against the position while the stock is moving down. This most recent trade is a 13 July; there is an ex-dividend date coming up in June, so there is a chance of an early call also.
I’ll take a loss if that happens. But it will also give me $6,500 in cash to go bargain shopping with…
Total option premiums: $425.11
Total dividend payments (counting June ex-date): $105.00
Total stock loss at $13.00: -$1,488.60
Total, absolute gain on the position: -$958.49
Total, absolute return percentage -$958.49/$7,971.42): Negative
Annualized total return percentage (held 240 days): Negative