The market is moving
sideways here in the early part of June, so I took a look at the covered calls
I had written on the COP and DVN positions.
The deltas on those June contracts had declined, so it was looking
unlikely that they would be called away at expiration – plus, the option
premium on the current contracts had fallen into my roll-out zone, trading in
the mid 20 cents range. So I rolled them
out.
In the case of DVN,
where I sold a September contract, I locked in the shares for the ex-dividend
date next month, and I am likely in line for the September dividend as well,
unless the shares are called away early then.
For COP, a May ex-date had already passed, so August is the next
scheduled dividend, and I have an August contract. We’ll see how these shares go.
In the meantime, here’s
the analysis of the two positions.
COP
The COP position
consists of 200 shares. My basis is $64.18
per share, and the stock is trading below there. I am selling $65 strikes, this transaction
rolled out June options to August.
Total option
premiums: $187.48
Total dividend payments
(including the forecast August ex-dividend):
$264.00
Total stock gain at $65: $147.89
Total, absolute gain
on the position: $599.37
Total, absolute return
percentage ($599.37/$12,835.00): 4.67%
Annualized total
return percentage (held approx 90 days):
18.94%
DVN
This is a 200 share
position I established last month. My
current share basis is $60.07, and I am selling $60 strikes – I rolled out June
contracts to September in this transaction.
Total option premiums: $683.48
Total dividend
payments (counting September ex-dates):
$88.00
Total stock gain at $60: -$31.91
Total, absolute gain
on the position: $739.57
Total, absolute return
percentage ($739.57/$12,014.80): 6.16%
Annualized total
return percentage (held 120 days): 18.72%
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