Wednesday, January 9, 2013

Adjusting LNC: A Roll-Out

During the rally last week I took advantage of the action to roll-out a few of my positions, and I also rolled a couple up to higher strike prices.  As a result, I no longer have any covered call positions with a January expiration, including the LNC position I established with an eye for an early call on the ex-dividend date of January 8. 

I had rolled the $26 covered call on LNC from January to February to collect a little more call premium revenue.  The position has been in the money the whole time I’ve held it, rising to more than $27 by yesterday – with a $0.12 per share dividend in the offing, I thought an early call was a pretty sure thing.  But you never know, and the shares were still in my account this morning, January 9.

So here are the results of the roll-out.  I will have a few more posts up about the rest of the action in a few days.


The LNC position consists of 400 shares.  My basis is $25.87 per share, and the stock is trading north of $27.  I sold a $26 strike and have rolled it out once. 

Total option premiums:  $398.93
Total dividend payments (including yesterday’s ex-dividend):  $48.00
Total stock gain at $26.00:  $36.09
Total, absolute gain on the position:  $483.02
Total, absolute return percentage ($483.02/$10,346.80):  6.23%
Annualized total return percentage (held approx 60 days):  37.90%

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