When I wrote my
monthly summary for September, I noticed that I had made an error with my
management of the PSA position. I decided
that I would try and do something about that to correct what was then a poorly
performing position – I had to look into the back months to do a roll-out and
roll-up combination – that trade will be the first I summarize here. With the repair trade the position will earn an estimated
return of almost 13%, which is in line with my goals for individual positions
in Rescue My IRA.
I also rolled out the
new TXT position I’d established last month.
The stock is down a little, very possibly because of the government
shutdown, so I decided to do an adjustment from October calls to December
calls. Even by adding 60 days to the
holding period, this position will earned an estimated 17% if it is called away
in December.
Here’s the analysis of
the two positions.
PSA
The position consists
of 100 shares at a basis of $163.52 per share.
This trade involved a roll-up from a $160 strike to a $165 strike, while
simultaneously rolling out from October 2013 to December 2013.
Total option
premiums: $477.21
Total dividend payments
(including the forecast December ex-dividend):
$250.00
Total stock gain at $165: $130.89
Total, absolute gain
on the position: $858.10
Total, absolute return
percentage ($858.10/$16,352.00): 5.25%
Annualized total
return percentage (held approx 150 days):
12.77%
TXT
This is a 300 share
position with a share basis of $29.30, total cost of 8,791.00. I am selling $29strikes, and the trade here
rolled the contract out from October to December.
Total option premiums: $480.71
Total dividend
payments (counting ex-dates through the contract term): $6.00
Total stock loss at $29: ($108.11)
Total, absolute gain
on the position: $378.61
Total, absolute return
percentage ($378.61/$8,791.00): 4.31%
Annualized total
return percentage (held 90 days): 17.47%
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