Adjusting BA, COP, and CRUS

I was traveling last week on September 30 and didn’t have the chance to check my account values at the market close – so my monthly status report will have to wait until I get my statement in a few days.  In the meantime, the market kept trading, and we had a volatile day or two.  I used the down day on Thursday to make some adjustments to a few positions – BA, COP, and CRUS – which all had Oct covered calls written against them. 

In BA’s case, I rolled out from the 130 Oct to the 130 Nov, and netted $129.  For COP, I rolled out from Oct to Jan – the sector is getting beaten down a bit, so I had to go further out on this transaction – netting $75.  Finally, with CRUS, I rolled out from Oct to Nov and netted $200. 

One of my goals with Rescue My IRA is to use covered calls to make money in down markets as well as up markets…which is exactly what happened on this trading day!

Here are the position plans for BA, COP, and CRUS after the most recent trades, as always net of fees and commissions and assuming I collect dividends through the holding period:

BA

This is a 100-share position with a basis of $12,937.00, or $129.37 per share.  The current covered call is $130 Nov 2014, I opened the position in September with the $130 Oct. 

Total covered call premiums:  $287.23

Total dividend payments (assumes I collect November):  $73.00

Total stock gain at $130:  $45.00

Total, absolute gain on the position:  $405.23

Total, absolute return percentage ($405.23/$12,937.00):  3.13%

Annualized total return percentage (approx 60 days if held to expiration):  19.06%

COP

This is a 100-share position with a basis of $8,050.00, or $80.51 per share.  I started by selling $80 covered calls, in the money, with the intention of having a short holding period.  Thursday’s dip gave me a chance to roll out the October contract, so I did.

Total covered call premiums:  $225.23

Total dividend payments (forecast October and January 2015 ex-dividends):  $146.00

Total stock gain at $80:  -$68.99

Total, absolute gain on the position:  $302.24

Total, absolute return percentage ($302.24/$8,050.00):  3.75%

Annualized total return percentage (held approx 120 days):  11.42%

CRUS

This is a 400-share position, established in February 2014, with a basis of $8,038.00, or $20.10 per share.  I started by selling $20 covered calls, in the money, but have gradually rolled up to $22 covered calls.  I’ve also been able to roll this position out on a monthly basis and it has been a rewarding experience so far.

Total covered call premiums:  $1,000.333

Total dividend payments (no dividend on this stock):  $0.00

Total stock gain at $22:  $744.00

Total, absolute gain on the position:  $1,744.33

Total, absolute return percentage ($1,744.33/$8,038.00):  21.70%

Annualized total return percentage (held approx 270 days):  29.34%

I am very happy with the returns to date on CRUS, but should note that it is a position that does not meet my usual criteria for a Rescue My IRA trade – it is a 3-star stock with S&P and doesn’t pay dividends.  Still, things are working out, but it is definitely an exception to my rules.