Like many of my generational colleagues, the baby boomers, I've found that my best intentions about saving for retirement aren't always meeting the mark. In 2011, I took some old 401(k) accounts and combined them into a self-directed IRA with Scottrade, and established a strategy of using covered calls to stabilize and enhance my returns. Rescue My IRA chronicles the progress of my IRA rescue using this approach.
Friday, October 31, 2014
We had a volatile
month, but as October comes to an end, the markets have returned to the levels
they started with. Most of the activity
for Rescue My IRA consisted of roll-outs and adjustments during the correction
that took place mid-month; I did try to set up a couple of new positions with
DIS and QCOM – I was successful with DIS but passed on QCOM for now; and
yesterday I unwound my AAPL position, which is the topic of this post.
With the stock well
above my strike price of 100 for the November calls, and an ex-dividend date
coming up in early November, the timing was opportune to take profits with an
eye towards setting up another position.
I haven’t decided what that will be yet, but I’m working on it.
In the meantime, here
is the final analysis of the AAPL trade, net of commissions and fees:
Bought 100 shares in June
2014 at an average price of $93.81, total position basis $9,380.99
Sold on unwind 100
shares at $10.701.76.
income: -$458.31 (By unwinding, I exchanged the option premium
for additional stock gains in this trade)
Total Net Profit after Unwinding: $909.46
Absolute Return on Investment: ($909.46/$9,380.99) = 9.69%
Annualized Return (130 days): 9.69%*(365/130) = 27.22%