Diversion

Tuesday, November 19, 2013

Rolling out F and IP

We’re in the middle of a great month here in November 2013 – plenty of new highs getting strung along so far this week.  That’s put most of my positions, which are all S&P 500 stocks, in the money, or close to it.  I used the trading action of the last two weeks to do some adjustments on the shares that hadn’t made it to that status:  F and IP.

For F, the position is right at the target of 12% annualized return, the goal for Rescue My IRA positions, while IP is performing slightly better than that.  Here’s the analysis of the two positions.

F

F is a 500 share position started in August, bought in two lots, with a basis of $8,616.00 and average share price of $17.23.  I have been selling covered calls at $17.00, $17.50, and $18.00 on the position.

Total option premiums:  $288.19
Total dividend payments:  $50.00
Total stock gain at $17:  -$133.11
Total, absolute gain on the position:  $205.08
Total, absolute return percentage ($205.08/$8,616.00):  2.38%
Annualized total return percentage (held approx 75 days):  11.58%

IP

This is a 200 share position I established in June.  My current share basis is $47.93, and I am selling strikes between $47.00 and$49.00 – the current contract is a January 2014 $47.00.

Total option premiums:  $788.35
Total dividend payments:  $180.00
Total stock gain at $47:  -$202.11
Total, absolute gain on the position:  $766.24
Total, absolute return percentage ($766.24/$9,585.00):  7.99%

Annualized total return percentage (held 180 days):  16.21%

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