So
far in May, I’ve opened two new Rescue My IRA positions, one each in CSCO and
DOW. I’ll catch up those posts today
with an assessment of the position plans.
I
placed the DOW trade first, early last week.
The source of funds was the proceeds of the FCN trade, which I had
unwound for a profit – I guess that is another post I should catch up on this
week!
The
CSCO trade was one I decided to place after thinking a little bit about the
market: I think it has legs until
October or so, once election activities get hot and heavy and we collectively
start thinking about what the change will mean.
Until then, I wanted to get more of my cash reserves into stock, so with
the CSCO trade I have the ratio down to around 12 percent.
Here
are the position plans for CSCO and DOW, net of commissions and fees.
CSCO
CSCO
is one of a half dozen or so stocks I have traded multiple times in Rescue My
IRA. I bet there has been at least one
per year and probably two per year a couple of times. It’s such a well-recognized brand name that I
have no reservations choosing it, as long as it meets my other selection
criteria.
Transactions
Bought
300 shares in two transactions at average share price $29.14 (total basis $8,741.99)
Sold 3 $30 June 2015 covered calls
Sold 3 $30 June 2015 covered calls
Net
Profit:
1) Options Income: = $141.25
2) Dividend Income (no dividend forecast during contract): $0.00
3) Capital Appreciation if assigned at $30.00: $240.01
1) Options Income: = $141.25
2) Dividend Income (no dividend forecast during contract): $0.00
3) Capital Appreciation if assigned at $30.00: $240.01
Total Net Profit if assigned in June: $381.26
Absolute Return on Investment: ($381.26/$8,741.99) = 4.36%
Annualized Return if Assigned and Dividend Collected (40 days): 4.36%*(365/40) = 39.80%
DOW
I
traded DOW earlier this year. When I ran
my screen to reinvest the proceeds from FCN, it was the only stock I did not
currently hold in Rescue My IRA. So
there you go.
Transactions
Bought
200 shares at average share price $51.92 (total basis $10,383.00)
Sold 2 $52.50 June 2015 covered calls
Sold 2 $52.50 June 2015 covered calls
Net
Profit:
1) Options Income: = $205.50
2) Dividend Income (no dividend forecast during contract): $0.00
3) Capital Appreciation if assigned at $52.50: $99.00
1) Options Income: = $205.50
2) Dividend Income (no dividend forecast during contract): $0.00
3) Capital Appreciation if assigned at $52.50: $99.00
Total Net Profit if assigned in June: $304.50
Absolute Return on Investment: ($304.50/$10,383.00) = 2.93%
Annualized Return if Assigned and Dividend Collected (45 days): 2.93%*(365/45) = 23.79%
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