Saturday, March 9, 2013
Rolling out CMI
It does indeed appear that the Rescue My IRA will have a slow trading month during March. I don’t have any expiring positions to manage – although I have six April contracts, and five positions that will go ex-dividend during March, so there may be some action later. However, with the market chugging along reaching all-time highs every day this week, the prudent thing is to watch the portfolio and wait.
Early in the month I did have the opportunity to roll out my CMI position from a March contract to an April contract. I did not post on that trade yet, so I’ll take a moment to make up for that today.
Here’s the analysis based on the current position:
The 100 position consists of 100 shares with a basis of $119.56. I bought the stock in February, selling a 120 strike and trading with an ex-dividend date bearing down on us. The position was not called early, so now I have collected the dividend payment, and we’re just out of the money on the April 120.
Total option premiums: $400.23
Total dividend payments: $50.00
Total stock gain at $120: $26.89
Total, absolute gain on the position: $477.12
Total, absolute return percentage ($477.12/$11,956.00): 3.99%
Annualized total return percentage (held approx 60 days): 24.28%