Tuesday, January 7, 2014
Two Roll-outs: CAT and FB
I took advantage of the great trading days we’ve had so far in 2014 to adjust my CAT and FB positions. Both are net gainers, but they are case studies of positions on two different tracks.
I’ve held CAT since the fall of 2012 – it’s been a long haul – while it is making money, it is not making my target return of 12 percent annualized. This is my second go ‘round with FB; I made a great return the first time, and I recently updated the current trade by adding a second 100 share lot. On this FB trade, which I’ve held for about 90 days so far, I’ve already met my goal of a 12 percent annualized return.
Here’s the analysis of the two positions.
The CAT position consists of 100 shares with a basis of $87.17. I have sold strikes ranging from $85 to $95 over the course of the 15 month holding period; the current option is $90 May 2014.
Total option premiums: $717.37
Total dividend payments (including the forecast January and April ex-dividends): $396.00
Total stock gain at $90: $265.83
Total, absolute gain on the position: $1,379.20
Total, absolute return percentage ($1,379.20/$8,716.99): 15.82%
Annualized total return percentage (held approx 630 days): 9.17%
This is a 200 share position established over the last two months with two 100 share purchases. My current per share basis is $54.94, for a total of $10,988.49. I recently did a roll-up to the $60 strikes while adding 100 shares – post is here: http://rescuemyira.blogspot.com/2013/12/fb-add-on-and-roll-up.html
Total option premiums: $274.93
Total dividend payments (no dividends on FB, making it a rule-breaker!): $0.00
Total stock gain at $60: $994.40
Total, absolute gain on the position: $1,269.33
Total, absolute return percentage ($1,269.33/$10,988.49): 11.55%
Annualized total return percentage (held 120 days): 35.14%