I took advantage of
the rally during the first week of January 2013 to make some adjustments to
positions – especially those that had January expirations, as my 100 share
position in CAT did. I first bumped up
to a $92.50 strike, and then to a $95 – a two-step roll-out is not as efficient
as it might have been, but if the position is called at this price I will have
completed a hat trick and exceeded my goal of 12% return on invested capital.
I'll put up two more posts about the early January trades over the next week.
Here’s the analysis of
the CAT position.
CAT
The CAT position
consists of 100 shares. My basis is $87.17
per share, and the stock is trading near $95.
I sold a January $90 covered call before rolling to a February $92.50
and then a May $95.
Total option
premiums: $556.20
Total dividend
payments (including the forecast March ex-dividend): $156.00
Total stock gain at $95.00: $765.83
Total, absolute gain
on the position: $1,478.03
Total, absolute return
percentage ($1,478.03/$8,716.99): 16.96%
Annualized total
return percentage (held approx 240 days):
25.79%
No comments:
Post a Comment