Monday, July 21, 2014

Unwinding T

Last week I unwound the 200-share Rescue My IRA position in T after collecting the July dividend and prior to its August expiration date - for background, I treat dividends as collected if I hold the shares on the ex-dividend date. I had purchased the shares in June and sold an August $35 covered call against them, but with the Delta on that contract moving past 1.0 last week I took advantage of the opportunity for an early close out of the trade.

Here’s the final analysis of the T trade, net of commissions and fees:


Bought 200 shares in June 2014 at an average price of $35.09, total position basis $7,018.98.
Sold on unwind 200 shares at $7,294.95, total stock gain:  $275.87

Total options income:   -$223.01 (By unwinding, I exchanged the option premium for additional stock gains in this trade)

Total dividends collected:  $92.00

Net Profit:
Total Net Profit after Unwinding:  $144.86
Absolute Return on Investment: ($144.86/$7,018.98) = 2.06%
Annualized Return (35 days):  2.06%*(365/35) = 21.52%

No comments:

Post a Comment