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.
Thursday, September 20, 2012
GE Called Early
Even though options expire on Friday this
week, September 21- tomorrow as I am writing this post, I expected that my GE
position might be called away today, since it was dividend ex-date. And I was right, so this morning I had an
email saying that my 500 shares were assigned.
I opened the position in late February – very likely
during that hellish spate of travel I was on back then. So after just more than six months, I’ve
exited the position. Along the way, I’ve
collected options premiums, two dividend payments, and at the strike price I
collected a price gain – so GE was a hat trick.
Not only that, when annualized, the actual
return of 7.85% is 13.64%, which exceeds my annual return goal of 12.00%.
Here is the record on this position, as usual,
net of fees and commissions:
2/27/2012 Bought 500
shares at an average price of $19.40, total position basis $9,702.00
9/20/2012 Sold on
assignment 500 shares at $9,982.89, average share price $19.97
1) Stock gains: $280.89
3) Dividend Income: $170.00
Total Net Profit after
Absolute Return on Investment: ($760.59/$9,702.00) = 7.85%
Annualized Return (210 days): 7.85%*(365/210) = 13.64%