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.
Friday, December 21, 2012
On Wednesday and
Thursday, the 19th and 20th of December, we had some good
market days. I used them to make an
adjustment on SPLS, which I’ve been holding for a long time now. It’s an underperforming member of the
portfolio, and I am ready to spin out the 700 shares and get that capital
reinvested. It’s a quality stock, but it just doesn’t seem to go anywhere.
basis in the shares is $14.70 – an average share price. I’ve sold covered calls at a $17 strike, and
have systematically rolled the calls down and out so that I have generated a
decent enough return with the premiums. I sold June 2013 $15 contracts most
recently, but decided to close those and sell something closer in and at a
lower strike, for the wash – now I have April $13s.
collect a nice dividend here too. But to
be honest, managing this position is no fun, and I’d like to be rid of it. I’ll take the small loss at $13 if the shares
are called away – I’m practically at breakeven…and who knows, if these shares
start to rise I may be able to roll them up.
January and August
2012, bought 700 shares at an average price of $14.70, total position basis
If the shares are
called at the $13 strike, I will get back $9,082.82 net of commissions, for a
loss of $1,205.60.
Total dividends collected: $336.00
1) Stock gains: -$1,205.60
3) Dividend Income: $336.00
Total Net Profit after
Absolute Return on Investment: Negatory
Annualized Return (360+ days): Negatory