Like many of my generational colleagues, the baby boomers, I've found that my best intentions about saving for retirement aren't always meeting the mark. In 2011, I took some old 401(k) accounts and combined them into a self-directed IRA with Scottrade, and established a strategy of using covered calls to stabilize and enhance my returns. Rescue My IRA chronicles the progress of my IRA rescue using this approach.
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
Sold to open $24 Sep
I did not collect the
dividend on these shares, as the position was called away on the ex-dividend