Wednesday, December 26, 2012
New Position: AFL...and Adding to LNC
I have been working on finding a couple of new positions, and today I added a second financial to the portfolio with stock AFL. It didn’t use all of the investable capital I had on hand, so I added one lot of LNC, the other stock I added this month – that makes four lots, all with 26 Jan 2013 covered calls written on them. For the AFL, I sold a 55 Feb 2013; in both cases, the stocks have ex-dividend dates between now and the options expiration date and I may see early calls.
Here’s the analysis.
The AFL position I established today consists of 100 shares. My basis is around $5,399.00, or $53.99 per share. I sold the 55 Feb strike on the single lot.
Total option premiums: $123.74
Total dividend payments (including the forecast Feb ex-dividend): $35.00
Total stock gain at $55: $83.89
Total, absolute gain on the position: $242.63
Total, absolute return percentage ($242.63$5,399.00): 4.49%
Annualized total return percentage (held approx 60 days): 27.34%
I also added 100 shares to my LNC position today, which had been 300 shares. The new basis is $10,346.80, or $25.87 per share. I sold 26 Jan 2013 covered calls against all of the shares.
Total option premiums: $258.96
Total dividend payments (including January ex-date): $48.00
Total stock gain at $60.00: $36.09
Total, absolute gain on the position: $343.05
Total, absolute return percentage $343.05/$10,346.80): 4.42%
Annualized total return percentage (held 30 days): 53.83%