Like many of my generational colleagues, the baby boomers, I've found that my best intentions about saving for retirement aren't always meeting the mark. In 2011, I took some old 401(k) accounts and combined them into a self-directed IRA with Scottrade, and established a strategy of using covered calls to stabilize and enhance my returns. Rescue My IRA chronicles the progress of my IRA rescue using this approach.
Wednesday, June 18, 2014
I unwound my 27 Aug
covered call for INTC yesterday. The
stock was in the money and there wasn’t much point in letting the investment just
sit there for another two months with little upside. It is the earliest I’ve had the opportunity
to close out an in the money position – now I’ll move on to finding a new stock
to roll the funds into.
Here is the final
analysis of this INTC trade, net of commissions and fees:
Bought 300 shares in April
at an average price of $26.57, total position basis $7,972.00
Sold on unwind 300
shares at $8,992.80.
income: -$685.02 (By unwinding, I exchanged the option premium
for additional stock gains in this trade)
Total Net Profit after Unwinding: $403.28
Absolute Return on Investment: ($402.38/$7,972.00) = 5.06%
Annualized Return (days): 5.06%*(365/73) = 25.29%