Diversion

Thursday, April 24, 2014

New Positions: INTC and MAT

After reviewing the results last month, I decided that I needed to improve the diversity of the Rescue My IRA portfolio – increasing the number of positions to somewhere between 12 and 16 stocks, which I consider a risk management strategy.  After the recent unwindings of CAT and GLW, I had the funds to begin implementing this strategy, and added three positions – INTC, JPM, and MAT – bringing the number of positions in the portfolio to 12.

Today’s post is about INTC and MAT; I’ll write about the JPM position soon.

INTC

Transactions

Bought 300 shares at average share price 26.57 (total $7,972.00)
Sold 3 27 May 2014 calls, and have subsequently rolled out to August.

Net Profit:

1) Options Income: $270.73
2) Dividend Income: $135.00
3) Capital Appreciation if assigned at $27.00:  $110.00

Total Net Profit if assigned and dividend collected:  $515.73
Absolute Return on Investment: ($515.73/$7,972.00) = 6.47%
Annualized Return if Assigned (133 days):  6.47%*(365/135) = 17.75%

MAT

Transactions

Bought 200 shares at average share price $40.18 (total $8,036.00)
Sold 2 40 May 2014 calls, and have subsequently rolled out to July.

Net Profit:

1) Options Income: $339.46
2) Dividend Income: $76.00
3) Capital Appreciation if assigned at $40.00:  -$54.00


Total Net Profit if assigned and dividend collected:  $361.46
Absolute Return on Investment: ($361.46/$8,036.00) = 4.50%
Annualized Return if Assigned (104 days):  4.50%*(365/104) = 15.79%

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