Unwinding DIS and MRK

On Wednesday, all the stars aligned, and since their deltas were over 1.00 and ex-dividend day was upon us, I decided to unwind two more of my December contracts:  DIS and MRK.  I still have one December contract left for WFC.  It is in the money and I will take a look at potentially unwinding it next week, but I may go ahead and let it ride until expiration next Friday.   

On an annualized basis, both of these positions exceeded my goals for a 12% annualized return – I held DIS for 50 days and MRK for 22 – and even on an absolute basis I met my goals for these contracts:  DIS 4.82% and MRK 1.28%.  I assumed when I opened the positions that they would be called away before the ex-dividend date, so unwinding them also saved me $10 in assignment fees for each one.

Here is the record on the DIS and MRK positions, net of fees and commissions:

DIS

Shares:

Bought 200 shares at an average price of $67.56, total position basis $13,511.00

Sold on unwind 200 shares at $14,324.75 net.

Total stock gain:  $813.75

Options:

Total options income:   -$163.02

Dividend:

Total dividends collected:  $0.00

Net Profit:
Total Net Profit after Unwinding:  $650.73
Absolute Return on Investment: ($650.73/$13,511.00) = 4.82%
Annualized Return (50 days):  4.82%*(365/50) = 35.16%

MRK

Shares:

Bought 200 shares, average price $47.87, position basis $9,573.00

Sold on unwind 200 shares at $9,796.82

Total stock gain:  $223.82

Options:

Total options income:   -$101.82

Dividend:

Total dividends collected:  $0.00

Net Profit:
Total Net Profit after Unwinding:  $122.80
Absolute Return on Investment: ($122.80/$9,573.00) = 1.28%
Annualized Return (22 days):  1.28%*(365/22) = 21.28%