Monday, September 9, 2013
Rolling out IP
During the downward sloping trading action last week – we are all in a tizzy over Syria, don’t you know – I rolled out a couple of positions that had September expirations. Today I will post about rolling out the IP position in the Rescue My IRA account and the smaller position I have in my stand alone account, and I will post about rolling out TRV later in the week.
As it stands today, I have only one September contract left, BA 105, which is in the money. I will keep an eye on this one as expiration approaches next week to see if I can unwind it, and if not, we’ll let it run to see if it is called away.
Here’s the analysis of the two positions.
The current Rescue My IRA IP position consists of 200 shares. My basis is $47.93 per share, so for most of the holding I’ve had $48 strike prices. I also rolled up when I made this trade, so my strike is now in-the-money $49; this trade also rolled out my contracts from September to October.
Total option premiums: $528.42
Total dividend payments: $120.00
Total stock gain at $49: $197.89
Total, absolute gain on the position: $846.31
Total, absolute return percentage ($846.31/$9,585.00): 8.83%
Annualized total return percentage (held approx 150 days): 21.49%
IP – Conventional Account
This is a 100 share position I established at about the same time as the one above. The share basis is $47.76 on this position, and I rolled up to $49 and out to October with this trade as well.
Total option premiums: $221.45
Total dividend payments: $60.00
Total stock gain at $49: $107.24
Total, absolute gain on the position: $388.69
Total, absolute return percentage ($388.69/$4,775.65): 8.14%
Annualized total return percentage (held 150 days): 19.80%