Diversion

Thursday, July 26, 2012

Adjustments: Rolling out CSX, DOW, and GLW


I’m still working on digging out of the low strike prices for some of my positions.  I want to keep the math in the Rescue My IRA account easy, so I am going to try and keep my strike prices at nearly break-even or better going forward, and mostly working it out so that I am getting a premium.  

Recently I’ve rolled out old faithfuls GLW and CSX, and also DOW. 

I had to push out into the back months again for DOW and GLW, and I’m not happy about it, since I have a lot of money sitting in Dec, Jan, and Feb contracts. But these positions were established so that they meet my goal of at least 12% returns annually – and really, that’s all that matters at this point.

Here’s a summary:

CSX
This train keeps rolling.

Rolled out the 22.50 Aug to 22.50 Sep

Total Option Premiums:  $1,003.38
Total Dividends (including forecast ex-dividend dates through contract): $198.00
Total Stock Gain (if assigned): $370.99
Total Absolute Gain on Position: $1,685.86
Absolute Return on Position: 19.28%
Annualized Return on Position (held 300 days): 23.45%

DOW

Rolled out the 33 Dec to 33 Dec

Total Option Premiums:  $372.47
Total Dividends (including forecast ex-dividend dates through contract): $128.00
Total Stock Gain (if assigned): $137.46
Total Absolute Gain on Position: $637.93
Absolute Return on Position: 9.90%
Annualized Return on Position (held 220 days): 16.42%

GLW

GLW was hit with an earnings double whammy this week when some of its customers reported lower sales on their products, and then they missed expectations on their own earnings.  The new Feb position should give this position the time it needs to get everything worked out.

Rolled out and up the 13 Nov and 12 Aug over the course of several days to 13 Feb

Total Option Premiums:  $1,357.10
Total Dividends (including forecast ex-dividend dates through contract): $202.50
Total Stock Gain (if assigned): -$159.88
Total Absolute Gain on Position: $1,399.72
Absolute Return on Position: 15.15%
Annualized Return on Position (held 420 days): 13.16%

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