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: 

CMI

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%