Diversion

Sunday, June 15, 2014

Rolling out GE and PFE

Seems like I haven’t posted a few of my past trades, but then again, I didn’t trade for a couple of weeks while I was away on vacation.  By the way, thanks for 150 views of my monthly results for May! Today, I’ll put up the results of two roll-outs:  GE and PFE.

Here’s the analysis of the two positions, net of fees and commissions, and assuming I collect dividends through the holding periods.

GE

This is a 300-share position with a basis of $7,901.99, or $26.34 per share.  I started out by selling covered call $26 strikes, but rolled up to $27 and continue selling them. The current contract expires in September 2014. Even though I am forecasting a hat trick, with positive income from all three sources, this position is underperforming my goal of 12% annualized for total return.

Total covered call premiums:  $98.72
Total dividend payments:  $132.00
Total stock gain at $27:  $180.01
Total, absolute gain on the position:  $410.73
Total, absolute return percentage ($410.73/$7,901.99):  5.20%

Annualized total return percentage (held approx 180 days):  10.54%

PFE

This is a 300-share position with a basis of $9,256.00, or $30.85 per share.  This is a stock where I have gotten caught in a downgrade.  In the past I might have sold to exit immediately, but I decided to stay in and minimize stock losses – I’ll continue to manage it closely.  The current forecast is for a close to overall breakeven result with the $29 Aug 2014 contract.   

Total covered call premiums:  $635.20
Total dividend payments:  $156.00
Total stock gain at $29:  -$574.00
Total, absolute gain on the position:  $217.20
Total, absolute return percentage ($217.20/$9,256.00):  2.35%


Annualized total return percentage (held approx 235 days):  3.64%

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