Monday, January 6, 2014

Called Early on JPM

As I mentioned in the year-end wrap post, I have six trades under my belt already in the Rescue My IRA account.  Today I will post about JPM, which was called away last Thursday on its ex-dividend date. 

I have started using weeklies as part of my strategy to get more turnover in the account.  While I haven’t made any adjustments to my trading plan for this activity yet, I have had a couple of good trades using my usual stock selection criteria and selling near in-the-money (or even ITM) strikes with an ex-date coming up.  That’s what happened here with JPM, which I held for about 20 days.

Here is the record on this position, as usual, net of fees and commissions:


Bought 200 shares at an average price of $56.22, total position basis $11,243.00
Called away 1/2/2014, ex-dividend date, at $56.50, net $11,282.89
Total stock gain:  $39.89

Total options income:  $132.48

Total dividends collected:  $0.00 (called on ex-date)

Net Profit:
1) Stock gains:  $39.89
2) Options income:  $132.48
3) Dividend Income: $0.00

Total Net Profit after Assignment:  $172.37
Absolute Return on Investment: ($172.37/$11,243.00) = 1.53%
Annualized Return (20 days):  1.53%*(365/20) = 27.98%

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