This may be the only
time I ever posted three trades in a row where I was doing the same kind of
adjustment on the positions. On
Thursday, I took advantage of the market hiccup to roll my TGT position out a
month and up a strike price, just as I did earlier in the week for AAPL and IP.
I moved the TGT
contract from an August weekly at a strike price of $58.50 out to the regular
September contract at a strike price of $60.
The trade was nearly a breakeven on premiums, setting me back about $7
in covered call premiums given up, but I’ve assured myself of a chance to
receive the August dividend, and I have added the possibility of $1.50 per
share in stock gains. Plus, the
estimated annual return is almost 24% for a two month trade – double my goal of
12% annualized.
Here’s the analysis of
the TGT position as of this most recent trade, net of fees and commissions, and
assuming I collect dividends through the holding period.
TGT
This is a 100-share
position with a basis of $5,839.99, or $58.40 per share. I set the position up to trade weeklies, but
this trade rolled it out to a monthly basis.
Total covered call
premiums: $92.23
Total dividend
payments (August ex-dividend): $52.00
Total stock gain at $60: $142.01
Total, absolute gain
on the position: $286.24
Total, absolute return
percentage ($286.24/$5,839.99): 4.90%
Annualized total
return percentage (held approx 75 days): 23.85%
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