As April
began, there were three contracts expiring that I needed to plan for: CRUS, GLW, and PFE. I rolled out CRUS earlier in the week, and
today I unwound GLW. That leaves me with
PFE facing April expiration, and the option ($31 strike) is in the money, so I
will let the shares ride until there is no time value left and I can unwind –
the transaction is not optimized yet, as it was with GLW today.
In February I
last wrote about my GLW position, which was comprised of 600 shares, bought in
two lots:
At the $18
strike, I stood to take a small capital loss, but I could collect the dividend and a
nice call premium. Today I was watching
the stock closely and saw an opportunity to make an unwind trade that took back some of the capital loss, improving my overall return by a small amount. I pulled the trigger, and doing so upped the
absolute return from 3.19% to 3.36%, almost a full quarter of a point – it doesn’t
always work this way, in fact it usually results in a reduction of a few
decimals.
In any case,
here are the results of the two trades – the CRUS roll-out and the GLW
unwind. As always, results are net of commissions
and fees.
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: $868.40
Total dividend payments (no dividend):
$0.00
Total stock gain at $20: -$56.00
Total, absolute gain on the
position: $812.40
Total, absolute return percentage ($812.40/$8,038.00):
10.11%
Annualized
total return percentage (held approx 135 days): 27.33%
GLW
Shares:
As noted in the linked post above, this was a 600 share position bought in two lots, with an average price per share of $18.04 and total position basis $10,823.00
As noted in the linked post above, this was a 600 share position bought in two lots, with an average price per share of $18.04 and total position basis $10,823.00
Sold on unwind 600 shares at $12,712.71.
Total stock gain: $1,889.71
Options:
Total options income: -$1,585.69 (By unwinding, I exchanged the option
premium for additional stock gains in this trade)
Dividend:
Total dividends collected: $60.00
Net
Profit:
Total Net Profit after Unwinding: $364.02
Absolute Return on Investment: ($364.02/$10,823.00) = 3.36%
Annualized Return (62 days): 3.36%*(365/62) = 19.80%
Total Net Profit after Unwinding: $364.02
Absolute Return on Investment: ($364.02/$10,823.00) = 3.36%
Annualized Return (62 days): 3.36%*(365/62) = 19.80%
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