Like many of my generational colleagues, the baby boomers, I've found that my best intentions about saving for retirement aren't always meeting the mark. In 2011, I took some old 401(k) accounts and combined them into a self-directed IRA with Scottrade, and established a strategy of using covered calls to stabilize and enhance my returns. Rescue My IRA chronicles the progress of my IRA rescue using this approach.
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
collected: $0.00 (called on ex-date)
1) Stock gains: $39.89
3) Dividend Income: $0.00
Total Net Profit after
Absolute Return on Investment: ($172.37/$11,243.00) = 1.53%
Annualized Return (20 days): 1.53%*(365/20) = 27.98%