Friday, November 29, 2013

Unwinding TXT

Even with the holiday shortened trading week, there has been a lot of activity in the Rescue My IRA account so far.  In fact, yesterday alone, I did four roll-outs, netting about $400 in cash from the premiums.  Because of the holiday and how busy I’ve been so far, I’ll just list those four symbols today so I can get on with the topic of this post, the recent unwinding of my TXT position:  PSA, INTC, F and FB. 

The trading week started out tentatively, but we’ve ended up setting new highs for three consecutive days.  The articles I am reading are evenly split between their anticipation of a traditionally great month during December and a looming correction in the range of 10-20%.  Since I can be as wrong as any of the experts, I am going to hold off  on new positions during the month and let the contracts I have in place take care of themselves – there are still four December positions, even with the four roll-outs listed above.

One action I did take was to unwind my TXT position – there was an odd situation with the covered call premium once the delta reached 1.00, and I decided to close it out to get some cash off the table.  I did this even though TXT will go ex-dividend early next month.  The dividend is only $2.00; I decided that getting the cash in was more prudent than waiting to see what the market is going to do this month.

This was the second time I’ve taken a bite of TXT, it’s an S&P 5 star stock.  I held the previous position for 50 days; it also exceeded my goal of a 12% annualized return – that time it achieved a 24.83% annualized.  Even so, comparing the actual returns between the two positions, this one did a little better – 3.89% vs. 3.40%.

So here is the record on the TXT position, net of fees and commissions – it was an excellent performer, once again:


This was a 300 share position an average price of $29.30, total position basis $8,791.00
Sold on unwind at $9,742.83
Total stock gain:  $951.83

Total options income:   -$610.03 (due to unwind transaction)


Total dividends collected:  $0.00

Net Profit:
Total Net Profit after Unwinding:  $341.80
Absolute Return on Investment: ($341.80/$8,791.00) = 3.89%
Annualized Return (75 days):  3.89%*(365/75) = 18.92%

1 comment:

  1. That's nice insights and trading results Jim. Learn a lot reading your posts.

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