Monday, November 25, 2013
Rolling Out CAT and FB
After I post today about two roll-outs – CAT and FB – I’ll be caught up on the month’s trading. We’re headed into the holiday weekend and I’ll be drafting my monthly results to go up over the weekend. Of course the trading week will still have some opportunities and I will seek them out, posting if there are any more trades.
In the meantime, here’s the analysis of the CAT and FB positions.
This is a 100 share position established in August 2012; basis is $8,716.99 or $87.17 per share. This transaction rolled out to a $85.00 Feb 2014 covered call. I've held the position for more than a year - it's very much a dog of the DOW and just sort of limps along, albeit with an overall positive return on the position.
Total option premiums: $908.88
Total dividend payments (including dividends through the current contract): $336.00
Total stock gain at $85.00: -$234.17
Total, absolute gain on the position: $1,010.71
Total, absolute return percentage ($1,010.71/$8,716.99): 11.59%
Annualized total return percentage (held approx 540 days): 7.84%
Since I had a good experience with a short-term trade on FB last month, I decided to try again…even though I knew lightning probably wouldn’t strike twice. This is a 100 share position with a basis of $5,186.99 or $51.87 per share.
Total option premiums: $213.21
Total dividend payments (no dividend on this stock – a rule breaker!): $0.00
Total stock gain at $52.50: $45.90
Total, absolute gain on the position: $259.11
Total, absolute return percentage ($259.11/$5,186.99): 5.00%
Annualized total return percentage (held 47 days): 38.79%