Diversion

Sunday, September 16, 2012

Adjusting CSX (Again!)


I’m behind on posting, so I’m planning on writing up three trades I did over the last ten days or so.  This one is a roll-out on CSX – a staple of the Rescue My IRA portfolio; tomorrow, I will post about an early call on VIAB; and then I will post about an add-on to the DOW position and an adjustment to a lower strike price.

I first bought shares of CSX back in November of last year, which makes the position my longest held in the account.  This latest roll-out has the 500 share position in Oct 22.50 calls.  With dividends, call premiums, and the predicted stock gain, not only is this a hat trick – it has been for a long time now – but also it has earned an absolute return of 16.57% since I established it last year.

Here’s the analysis:

CSX

Basis:  500 shares costing $10,861.01, average share price $21.72
Total option premiums:  $1,230.38
Total dividend payments:  $198.00
Total stock gain at $22.50:  $370.99
Total, absolute gain on the position:  $1,799.37
Total, absolute return percentage $1,799.37/$10,861.01):  16.57%
Annualized total return percentage (held approx 330 days):  18.32%

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