Thursday, February 12, 2015

Called on the ex-date for a Hat Trick: BA

Yesterday, my BA position went ex-dividend and was called away – the stock has had a good run in the new year so far and has traded in-the-money since January.  The call was not unexpected; in fact, since I scored a hat trick with it – earning income from covered call premiums, a dividend payment, and a stock gain – it is one of this year’s Rescue My IRA success stories.

Next steps for me are to put the proceeds back to work, so I’m getting busy with research now.  In the meantime, here’s the final analysis of the BA trade, net of commissions and fees:


Bought 100 shares in September 2014 at an average price of $129.37, total position basis $12,937.00.
Sold on unwind 100 shares at $13,500.00. 
Total stock gain:  $545.70

Total options income:   $141.21 (for the term of this trade, strike prices ranges from $130 to $135)

Total dividends collected:  $73.00

Net Profit:
Total Net Profit after Unwinding:  $759.91
Absolute Return on Investment: ($759.91/$12.937.00) = 5.87%
Annualized Return (140 days):  5.87%*(365/140) = 15.31%

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