This is the second of
a couple of “catch up” posts – earlier, I wrote about four “unwind” transactions,
when I closed out covered calls on stocks I held, and now I’m writing about
two stocks I added to the Rescue My IRA covered call portfolio this month. The next post, in a couple of days, will
report my results in the account for the month of November.
Here are the position
plans for the two stocks, with anticipated results reported net of commissions
and fees:
GM
Transactions
Transactions
Bought 300 shares in early November at
average share price $31.02 (total $9,307.00)
Sold 3 $32 Dec 2014 covered calls
Sold 3 $32 Dec 2014 covered calls
Net Profit:
1) Options Income: = $163.24
2) Dividend Income (December ex-dividend): $90.00
3) Capital Appreciation if assigned at $32.00: $275.00
1) Options Income: = $163.24
2) Dividend Income (December ex-dividend): $90.00
3) Capital Appreciation if assigned at $32.00: $275.00
Total Net Profit if assigned on the ex-dividend date: $528.24
Absolute Return on Investment: ($528.24/$9,307.00) = 5.68%
Annualized Return if Assigned and Dividend Collected (52 days): 5.68%*(365/52) = 39.84%
WIN
There is a lot going on with this
stock – it is one I held before in the Rescue My IRA account, mainly because of
the annual yield of more than 10%. Now
there is the planned spinoff of assets into a REIT – with shares returned as a
dividend to WIN holders, and a December ex-dividend date that takes place
before the spinoff. All of this will
make for an interesting holding, with a likely early call on some or all of my
shares, but generally small investors can do well with these, and in any case,
there will be a return from the covered call premium, allowing a slight hedge
against the stock risks.
Transactions
Bought 800 shares at shares on
November 24, average share price $9.85 (total $7.879.00)
Sold 8 $10 Feb 2015 covered calls
Sold 8 $10 Feb 2015 covered calls
Net Profit:
1) Options Income: = $183.00
2) Dividend Income (December ex-dividend): $200.00
3) Capital Appreciation if assigned at $10.00: $103.00.
1) Options Income: = $183.00
2) Dividend Income (December ex-dividend): $200.00
3) Capital Appreciation if assigned at $10.00: $103.00.
Total Net Profit if assigned and dividend collected: $486.00
Absolute Return on Investment: ($486.00/$7,879.00) = 6.17%
Annualized Return if Assigned and Dividend Collected (90 days): 6.17%*(365/90) = 25.02%
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