Sunday, September 22, 2013

Called Away Early on GE

Mary and I were traveling last week – Las Vegas and the Grand Canyon.  It was a great trip, and while we were away I got a not that the most recent position I had established – a GE trade with a Sep Wk 4 covered call – had been assigned on the most recent ex-dividend date for the shares.

This is a pretty exceptional result – I held that position for six days and earned 1.05% on the trade…which works out to an astounding 63.75% annualized!  Even though the cash return was only $100, that is likely to be the best annualized rate of return I generate on a trade this year.

We were in Las Vegas - this trade and our experience at the Tropicana were almost enough to convince me to sit at a Blackjack table.

Here is the record on this quick turnaround position, as usual, net of fees and commissions:


Bought 400 shares at an average price of $23.85, total position basis $9.521.00
Sold on assignment 400 shares at $9,582.89, average share price $23.96
Total stock gain:  $51.89

Sold to open $24 Sep Wk 4
Total options income:  $47.99

I did not collect the dividend on these shares, as the position was called away on the ex-dividend date.

Net Profit:
1) Stock gains:  $51.89
2) Options income:  $47.99
3) Dividend Income: $0.00

Total Net Profit after Assignment:  $99.88

Absolute Return on Investment: ($99.88/$9,521.00) = 1.05%
Annualized Return (105 days):  1.05%*(365/6) = 63.75%

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