Friday, October 31, 2014

Unwinding AAPL

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. 
Total stock gain:  $1,320.77

Total options income:   -$458.31 (By unwinding, I exchanged the option premium for additional stock gains in this trade)

Total dividends collected:  $47.00

Net Profit:
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%

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