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%