Monday, December 23, 2013

New Position: JPM

Rescue My IRA entered a new position in JPM last week, since so many positions had been unwound and there was a lot of cash sitting on the sidelines.  I chose this stock because in addition to my normal selection criteria, I checked the Bollinger Bands and found that the shares were priced below the mean for the period of analysis, and they appeared to be regressing upwards – the strike price I selected was just above the mean.
There is also an ex-dividend date coming up, and so I also sold a weekly option contract in order to maximize a short-term trade.
Here are the details, net of fees and commissions: 

Bought 200 shares at a total of $11,243.00, basis $56.22
Sold 2 JPM Jan 3 $52.50 2014 for a total of $132.48

Net Profit:

1) Options Income:  $132.48
2) Dividend Income: $0.00 (January 2 is the ex-dividend date, I expect the shares to be called away)
3) Capital Appreciation if assigned at $52.50:  $39.89

Total Net Profit if Assigned:  = $247.37
Absolute Return on Investment: ($247.37/$11,243.00) = 2.21%
Annualized Return if Assigned (20 days):  2.21%*(365/20) = 40.32%

No comments:

Post a Comment