Coming on the heels of
yesterday’s post, about two underperformers in the Rescue My IRA portfolio,
today I am writing about unwinding SBUX with good results after only 38 days.
I drink a lot of
coffee, and I’m at SBUX every work day, plus that is the brand we drink at
home. So I figured, Warren Buffet says buy what you know – and when the stock
received a 4-star rating from S&P, it made it to my list of
potentials.
I set the position up
in May with a June contract, collected a dividend, and unwound it last
Thursday, a week before the contract expired.
Here is the final
analysis of the SBUX trade, net of commissions and fees:
SBUX
Shares:
Shares:
Bought 100 shares in May
2014 at an average price of $70.68, total position basis $7,068.00
Sold on unwind 100
shares at $7,462.84
Total stock
gain: $394.84
Options:
Total options
income: -$140.51 (By unwinding, I exchanged the option premium
for additional stock gains in this trade)
Dividend:
Total dividends
collected: $28.00
Net Profit:
Total Net Profit after Unwinding: $282.33
Absolute Return on Investment: ($282.33/$7,462.00) = 3.99%
Annualized Return (38 days): 3.99%*(365/38) = 38.37%
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