Wednesday, July 10, 2013

Unwinding JPM

The market has been on a four-day winning streak this week, so most of my positions are hitting the at-the-money or in-the-money marks.  In the case of the July contracts, several positions went deep in-the-money, which has become “unwind” territory for me. 

My JPM position was the latest of these, so I bought to close the final options on Monday morning and then sold the shares.  The result of this kind of trade is a slight improvement on the absolute return, plus there is the opportunity to get the cash reinvested immediately instead of waiting until expiration.

Right now, I have the money sitting on the sideline.  In fact, about 25% of the Rescue My IRA is sitting in cash at the moment.  I do plan to spend some time on stock picks within the next couple of days – soon as the hot streak is over!

Meanwhile, here is the analysis of the JPM position:   


Position basis:  300 Shares, basis $14,722.00, or $49.07 per share; Jul $52.50 was the final contract.
Option Premiums:  -$956.06
Dividends Collected:  $204.00
Stock Gain:  $1,663.60
Total:  $911.54
Absolute return 6.19%

Annualized return (115 days) 19.65%

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