Monday, February 10, 2014
Rolling Out IP
Last week seemed to offer a continuation of the consolidation we’ve been seeing during February so far; however, by Friday we finally had an up day, so the market ended on a higher note, and the value of the Rescue My IRA achieved a new high. Meanwhile, I took advantage of the trading earlier in the week and rolled out the IP position, securing this month’s dividend payment and scoring a nice premium from the extended covered call.
Here’s the analysis of the position, net of fees and commissions and assuming I collect the February dividend for IP.
This position consists of 200 shares, with a total basis of $9,585.00, or $47.93 per share. Since last June, I’ve sold strikes ranging from $47.00 to $49.00; the current covered calls have a strike price of $48.00.
Total covered call premiums: $811.31
Total dividend payments (including the forecast February ex-dividend): $250.00
Total stock gain at $48: -$2.11
Total, absolute gain on the position: $1,059.20
Total, absolute return percentage ($1,059.20/$9,585.00): 11.05%
Annualized total return percentage (held approx 210 days): 19.10%