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%

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