Wednesday, April 24, 2013

Meanwhile, In My Conventional Account

While this blog is primarily meant to cover my trades in the Rescue My IRA account at Scottrade, I have begun to use the covered call approach on a small conventional account that I have with the brokerage.  I generally use the same investing approach, trading plan – and even stock selection screeners for that purpose.

I recently closed a trade on MSFT in that account, and just established another on F – details of the trades are below.  I need to get with my tax guy now, to make sure that I have all the records I’ll need to do my schedule D.

I structured the F trade around an ex-dividend date of May 1, selling what was a near the money covered call, which has subsequently gone in the money.  However, F has earnings today – so there could be a change in strategy soon enough.

Details below:

Position basis:  200 Shares, basis $5,583.00, or $27.92 per share; Apr 28 assigned.
Option Premiums:  $181.48
Dividends Collected:  $46.00
Stock Gain:  -$0.11 (a loss of eleven cents!)
Total:  $227.37
Absolute return 4.07%
Annualized return (90 days) 16.52

Position basis:  500 Shares, basis $6,472.00, or $12.94 per share; May 13 calls sold
Option Premiums:  $141.74
Dividends Collected:  $0.00 (ex-date May 1, stock is in the money and I expect early assignment – otherwise I will collect $50.000)
Stock Gain:  $10.89
Total:  $152.63
Absolute return 2.36% (if the stock is not assigned May 1, this estimated return goes up to >3%)
Annualized return (20 days) 43.04%

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