Thursday, April 2, 2015

Called Away on the ex-date: JPM

I bought a couple hundred shares of JPM on the heels of my DIS trade last January.  It is a stock I've had a couple of good trades with over the course of the Rescue My IRA account, and this transaction adds to the track record.  

I held the shares a total of 75 days before they were called away on the April 1 ex-dividend date yesterday - and the trade earned an absolute return of 5.51% on the cash invested.  That works out to an annualized return of almost 27%, well above my goal of a 12% annualized return.

(For the original January post on this position, see this link.)

Meanwhile, here is the final analysis of the JPM trade, net of commissions and fees:


Bought 200 shares in January 2015, with a total basis of $11,223.00 and an average share price of $56.12.
The position was called away on the ex-dividend date at a $57.50 strike price, netting $11,482.77, for a total stock gain of $259.77.

Total options income:   $358.49 – I only sold one covered call on this trade, the April $57.50.

Total dividends collected:  $00.00 – the stock was called on the April ex-dividend date.

Net Profit:
Total Net Profit after Unwinding:  $618.26
Absolute Return on Investment: ($618.26/$11,223.00) = 5.51%
Annualized Return (75 days):  5.51%*(365/75) = 26.81%

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