Wednesday, November 21, 2012
Adjusting Two Mainstays: GLW and CSX
GLW and CSX are two positions that I have held since the start of the Rescue My IRA account – I have 700 and 500 shares in them respectively. Last week I rolled them out to May 2013. These transactions did result in their staying on target for my 12% annualized return, although extending so far into the back months does mean I am probably at the end of the run for them, so I would like to see them hit the strike price as these covered calls hit expiration.
Here’s a summary of the positions as of these most recent trades:
The most recent roll-out to 13 May 2013 covered calls is the tenth contract I have written on these shares. In looking over the history of these transactions, I have also written covered calls at the 12 and 14 strike. It would be good to get 14 for the shares, but for now I am holding with a strike price of 13.
Rolled out the 13 Feb to 13 May
Basis of 700 share position: $9,241.88, or $13.20 per share
Total Option Premiums: $1,451.59
Total Dividends: $276.00
Total Stock Gain (if assigned): -$159.88
Total Absolute Gain on Position: $1,567.71
Absolute Return on Position: 16.96%
On an annualized basis, after holding these shares for 510 days, the return works out to 12.14%
This is a 500 share position that epitomizes what I am trying to do with this account. I want to earn returns from option premiums, dividends, and stock price gains. I’ve been able to do that quite frequently with short-term trades, but here is one I have held for 510 days, since the beginning of the account. And the shares continue to perform for me.
Rolled out the 22.50 Feb to 22.50 May
Basis of 500 share position: $10,861.01, or $21.72 per share
Total Option Premiums: $1,479.74
Total Dividends: $338.00
Total Stock Gain (if assigned): $370.99
Total Absolute Gain on Position: $2,188.73
Absolute Return on Position: 20.15%
Annualized Return on Position (held 510 days): 14.42%
I’ll continue to manage this one, but I do wish that they would all work out as well as CSX has.