Adding on and Rolling Out GM and T

During the rock-and-roll week we just had, I took advantage of the down days to do some add-ons and roll-outs on GM and T.  While the shares were low, I added 100 shares to each of these positions while also rolling them out a month or two.

Here are the current position plans for GM and T after the roll-outs, net of fees and commissions, and assuming I collect dividends through the holding period:

GM

With all the company has been through in the last few years, GM is currently rated five stars by S&P.  I established a 300-share position in November 2014, and added 100 shares this week to make a 300-share position out of it.  The basis is now $12,397.99, or $30.99 per share.  The current covered call is $32 Mar 2015; I started with a $32 strike and have been rolling the contract out every other month or so.   

Total covered call premiums:  $520.95

Total dividend payments (includes March ex-date):  $210.00

Total stock gain at $32:  $384.01

Total, absolute gain on the position:  $1,114.96

Total, absolute return percentage ($1,114.96/$12,397.99):  11.98%

Annualized total return percentage (approx 142 days if held to expiration):  30.97%

T

As with GM, this position was established with a 300-share lot back in August, and I added 100 shares last week.  Now it is a 400-share position with a basis of $13,621.96, or $34.05 per share.  I have been selling covered calls at the $35 strike, rolling them just about monthly since I started.

Total covered call premiums:  $308.44

Total dividend payments (includes January ex-date):  $336.00

Total stock gain at $35:  $360.04

Total, absolute gain on the position:  $1,004.48

Total, absolute return percentage ($1,004.48/$13,621.96):  7.37%

Annualized total return percentage (held approx 200 days):  13.46%

GLW: Adding on and Rolling out

I recently picked up a 300-share lot of GLW, and then added a second 300-share purchase after a market dip last week.  The add-on purchase lowered my per-share basis from $18.76 to $18.04, so I was able to profitably move from $19.00 strikes to $18.00 on the covered call sales I make on the position. 

I have subsequently rolled-out the calls from February to April on GLW.  Although it hasn’t been announced yet, I also expect to see an ex-dividend date on these shares near the end of the month; the quarterly yield is 10 cents per share.

These factors combined to yield a 3.13% absolute return, annualizing to 18.42% after adjusting for my estimated 62-day holding period.  Here’s the analysis of the position, net of fees and commissions and assuming I collect the February dividend for GLW.

GLW

The GLW position consists of 600 shares, bought in two 300-share lots, with a current total basis of $10,823.00, or $18.04 per share.  I began by selling a February $19 covered calls, and recently rolled out to April $18. 

Total covered call premiums:  $318.81

Total dividend payments (including the forecast February ex-dividend):  $60.00

Total stock gain at $18:  -$40.11

Total, absolute gain on the position:  $338.70

Total, absolute return percentage ($338.70/$10,823.00):  3.13%

Annualized total return percentage (held approx 62 days):  18.42%

Adding on to CRUS

Frequent readers will remember that I have made an exception on my usual criterion of only using S&P 4- or 5-star stocks:  I am currently holding FB and CRUS, both 3-star stocks.  My goal with these two positions is to learn about managing volatility and risk.

On CRUS, I originally took a flyer on a 200-share position – low committed capital – and an S&P 3-star stock with no dividend, where I would normally limit my selections to 4- or 5-star stocks that pay from two to five percent annually.  The day before yesterday, after I established the new GLW position, I decided to add 200-shares and sell the January week 4 $20 on them – so I now have a four-lot position with this stock.

Here’s the analysis of the position, net of fees and commissions - if I took the time to break this down into the two 200 share lots, the return would be pretty exceptional due to the duration of the trades; however, to keep this brief I will report performance as an average of the two lots: 

CRUS

The position now consists of 400 shares, with a total basis of $8,038.00, or $20.10 per share. 

I originally sold January 2014 week 3 $20 strikes, but have rolled that out to week 4.  The position is currently in-the-money.

Total covered call premiums:  $441.95

Total dividend payments (no dividend on CRUS):  $0.00

Total stock gain at $20:  -$55.11

Total, absolute gain on the position:  $386.84

Total, absolute return percentage ($386.84/$8,038.00):  4.81%

Annualized total return percentage (held approx 22 days):  79.85%