A combination of activities has kept
me away from posting regularly over the last few months, but I have kept up my
trading activities in Rescue My IRA. I’ll
see if I can do better going forward, but in the meantime, here are my monthly
results for October 2015.
The market’s big news of late was
the correction that began in July and now seems to be behind us. At one point, Rescue My IRA had a statement
value of less than $160K, which meant for a time all the growth in the account
since 2014 was eliminated in the correction.
By October 31, the account was approaching $170K, so those paper losses
had been made up and we are in the black for 2015.
On the account maintenance front, I
did take some measures to protect capital and trim up some of the positions in
the portfolio. I had been working
towards growing the cash reserve starting in July, but the correction moved too
fast for me to fully meet my goal of getting 40-50% into cash; I made it to 25%,
which was more than I have held in cash for 18 months or so. I’m also holding steady at 12 positions in
play, at the low end of my typical range of from 12 to 16.
Notable transactions during October
included doing a wash sale (see the post here) on my DDD position, trading it into competitor
LXK. Also, I unwound and sold the EMC
position – the company was purchased by Dell, but the market didn’t like the
terms and the EMC shares were declining prior to the merger close, so I decided
to put those resources back into cash instead of waiting for resolution.
All in all, an interesting month,
one of several during this correction.
For the most part I kept the faith with my shares, only making changes
in certain circumstances such as DDD and EMC.
I ended up with trading losses for October, but despite that, the
recovery brings the account into positive territory for the year, and we’ll see
how we do in the remaining two months.
Here is a summary of benchmark results
for October 2015 – as always, these amounts are net of commissions and
fees. I will resume comparing monthly
results with the November post.
Account Status:
·
Total Account Value, 10/31/2015
Market Close: $169,015.51 – recovering from the correction, and once
again above the account’s 2015 starting point of $167,659.68.
·
Total Cash Reserve, 10/31/2015
Market Close: $40,283.41 – just less than 25%, currently evaluating an
appropriate level given the market recovery.
·
Core Stock Positions (as of 10/31/2015): AAPL (100 shares), CSCO (500 shares), DIS (100
shares), DOW (200 shares), FB (100 shares), GE (500 shares), HPQ (400 shares), LXK
(200 shares), MSFT (200 shares), NUE (200 shares), SPY (100 shares), XRX (500
shares)
Performance Metrics:
·
Option Premiums Collected (net,
month of October): $621.20 (0.37 %)
·
Capital Gains Collected (net, month
of October): -$5,141.15 (-3.17 %)
·
Dividends Collected (recognized on
the ex-date): $105.00 (0.06 %)
·
Estimated Interest on Cash Reserve:
$0.28
·
Total, Absolute Return: -$4,414.67
(-2.63% absolute return, annualized return not estimated)
Next Month To-dos:
November is a poor month for dividends, but not as bad as October. AAPL, LXK, and MSFT have ex-dividend dates, and I expect to collect $196.00, or 0.12% return, if the shares are not called away. At the time of this writing LXK has a November contract in-the-money, so there is a chance it will be called, reducing the dividend returns by $72.
November is a poor month for dividends, but not as bad as October. AAPL, LXK, and MSFT have ex-dividend dates, and I expect to collect $196.00, or 0.12% return, if the shares are not called away. At the time of this writing LXK has a November contract in-the-money, so there is a chance it will be called, reducing the dividend returns by $72.
The forecast of covered call
contracts set to expire this month include an FB and LXK. I have already rolled the FB position out and
up, from a $97.50 strike to a $100 strike, and from a November contract to a
January covered call. LXK was the wash
sale trade from DDD – I’m inclined to let these shares be called away, and even
if the dividend is taken from me that trade will earn $338, or 5.37% over the
one month duration – it’s a small piece of the DDD loss, but quite satisfactory
as a trade.
I don’t expect a lot of trading
activity for the balance of the month, since there is only one November
contract left. December promises to be
busier, as I have seven contract set to expire then. There is the matter of determining where I’d
like to be on cash reserves, so I may choose one or two new positions during
November, but I’m not ready to pull the trigger on that yet.
That’s it for the October
update. Until next month, happy trading!
