Diversion

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:

GE

Shares:
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
Total stock gain:  $280.89

Options:
Total options income:  $310.70

Dividend:
Total dividends collected:  $170.00

Net Profit:
1) Stock gains:  $280.89
2) Options income:  $310.70
3) Dividend Income: $170.00

Total Net Profit after Assignment:  $760.59
Absolute Return on Investment: ($760.59/$9,702.00) = 7.85%
Annualized Return (210 days):  7.85%*(365/210) = 13.64%

5 comments:

  1. very nice...keep up the good work!

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  2. I've showcased the anatomy of this set of trades for my readership. Very illustrative!

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  3. Thanks guys. I've learned a lot from your blogs too during the last year since I started working on covered calls!

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  4. For convenience, here are links to the opening trade for this GE position, and for the adjustment that I made to it last June. Along the way, I actually rolled out the 20 call a number of times - I held the March, April, June, July, and September contracts before it was finally called, as posted above.

    Purchase post: http://rescuemyira.blogspot.com/2012/02/three-new-positions-return-trips-with.html

    June adjustment post:
    http://rescuemyira.blogspot.com/2012/06/three-adjustments-rolling-out-ge-hal.html

    Best,
    Rescue Jim

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