I recently picked up a
300-share lot of GLW, and then added a second 300-share purchase after a market
dip last week. The add-on purchase
lowered my per-share basis from $18.76 to $18.04, so I was able to profitably
move from $19.00 strikes to $18.00 on the covered call sales I make on the
position.
I have subsequently rolled-out
the calls from February to April on GLW.
Although it hasn’t been announced yet, I also expect to see an
ex-dividend date on these shares near the end of the month; the quarterly yield
is 10 cents per share.
These factors combined
to yield a 3.13% absolute return, annualizing to 18.42% after adjusting for my
estimated 62-day holding period. Here’s
the analysis of the position, net of fees and commissions and assuming I
collect the February dividend for GLW.
GLW
The GLW position
consists of 600 shares, bought in two 300-share lots, with a current total
basis of $10,823.00, or $18.04 per share.
I began by selling a February $19 covered calls, and recently rolled out
to April $18.
Total covered call
premiums: $318.81
Total dividend
payments (including the forecast February ex-dividend): $60.00
Total stock gain at $18: -$40.11
Total, absolute gain
on the position: $338.70
Total, absolute return
percentage ($338.70/$10,823.00): 3.13%
Annualized total
return percentage (held approx 62 days):
18.42%
No comments:
Post a Comment