Unwinding FB and JPM

Last week two positions reached the threshold point where I will consider unwinding them: their in-the-money covered calls have a delta of zero, they expire this month (September 2014), and there are no ex-dividend dates before expiration.  The two stocks were JPM and FB, both were profitable, and both exceeded my goal of better than 12% annualized returns.

My long held PSA position was called away on ex-dividend last week as well – but I’ll save that for tomorrow’s post.  In any case, as a result of these trades the Rescue My IRA account is sitting on a lot of cash, so I need to get to work on finding new trades.

Meanwhile, here’s the final analysis for the two trades, net of commissions and fees:

FB

Shares:
Bought 200 shares in February 2014 at an average price of $70.21, total position basis $14,041.00
Sold on unwind 200 shares at $15,556.67
Total stock gain:  $1,515.67

Options:
Total options income:  $231.81 (By unwinding, I exchanged some of the option premiums for additional stock gains in this trade)

Dividend:
Total dividends collected:  $0.00 – FB doesn’t pay dividends


Net Profit:
Total Net Profit after Unwinding:  $1,747.48
Absolute Return on Investment: ($1,747.48/$14,041.00) = 12.45%
Annualized Return (210 days):  12.45%*(365/210) = 21.63%

JPM

Shares:
Bought 100 shares in April 2014 at an average price of $57.88, total position basis $5,787.99
Sold on unwind 100 shares at $5,990.87
Total stock gain:  $202.88

Options:
Total options income:  $3.98 (By unwinding, I exchanged the some of the option premiums for additional stock gains in this trade)

Dividend:
Total dividends collected:  $40.00


Net Profit:
Total Net Profit after Unwinding:  $246.86
Absolute Return on Investment: ($246.86/$5,990.87) = 4.27%
Annualized Return (87 days):  4.27%*(365/87) = 17.89%