Diversion

Friday, June 7, 2013

Rolling out IP

As I did a couple of months ago, I established positions with the same stock in both my Rescue My IRA account and my conventional trading account.  The stock I chose was IP – it’s one that has served well in Rescue My IRA, since I have traded it four or five times. 

My per share basis in both accounts is just less than $48 and I am selling $48 strikes, rolling them monthly.  Last week I rolled both out from June contracts to July – here’s the analysis on the positions.


IP – Rescue My IRA position

The IP position consists of 200 shares.  My basis is $47.93 per share.  I am selling 48 strikes and rolling them monthly; this transaction rolled out June options to July. 

Total option premiums:  $309.46
Total dividend payments:  $60.00
Total stock gain at $48:  -$2.11
Total, absolute gain on the position:  $367.35
Total, absolute return percentage ($367.35/$9,585.00):  3.83%
Annualized total return percentage (held approx 60 days):  23.31%

IP – Conventional Trading Account Position

This is a 100 share position.  My share basis is $47.75, and I am selling $48 strikes – this transaction also rolled out a June contract to July. 

Total option premiums:  $128.23
Total dividend payments:  $30.00
Total stock gain at $48:  $7.24
Total, absolute gain on the position:  $165.47
Total, absolute return percentage ($165.47/$4,775.65):  3.46%
Annualized total return percentage (held 60 days):  21.08%


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