Despite losing so much
of my portfolio data when my old laptop crashed, I’ve continued trading
activities. I’ve got three posts queued
up beginning with this one today – two roll-outs, including a position repair
on KO; unwinding a March contract; and establishing two new positions – I’ll
start with the roll-out post today.
Of the two positions,
one is faring well – CRUS, even though it is something of a rule breaker in
Rescue My IRA, since it doesn’t pay a dividend and it is not even ranked by
S&P. That makes it quite a bit more
speculative than most stocks I pick for this account.
The second position is
KO, a gem of a stock that is always held in high regard. The company is going through transition
struggles right now, and it has been an underperformer for Rescue My IRA. Despite this, I decided to roll it out to a
strike price that keeps me from losing money on it, even though it will not
meet my goal of a 12% annualized return for positions in the account.
Here’s the analysis of
the two positions, net of fees and commissions, and assuming I collect dividends
through the holding periods.
CRUS
This is a 400-share
position with a basis of $8,038.00, or $20.10 per share. I have been selling $20 strikes and rolling
them monthly.
Total covered call
premiums: $648.42
Total dividend
payments (no dividend): $0.00
Total stock gain at $20: -$56.00
Total, absolute gain
on the position: $592.42
Total, absolute return
percentage ($592.43/$8,038.00): 7.37%
Annualized total
return percentage (held approx 105 days): 25.62%
KO
This is a 400-share
position with a basis of $16,142.96, or $40.36 per share. Since last July, I have been selling covered
calls ranging from $38 to $40, and have mostly been out of the money while the
stock flounders. I decided to stay in
and minimize stock losses, so this trade rolled out and up from a $38 to an Aug
$39 strike – also ensuring I captured the March ex-dividend. If I get another
chance for a roll-out, I’ll take it up to a $40 strike.
Total covered call
premiums: $937.36
Total dividend
payments (forecast March and June ex-dividends): $448.00
Total stock gain at $39: -$560.96
Total, absolute gain
on the position: $824.40
Total, absolute return
percentage ($824.40/$16,142.00): 5.11%
Annualized total
return percentage (held approx 365 days): 5.11%
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