Tuesday, February 6, 2007

SNDK - Adjustment

The following adjustment was made today on SNDK:

06-Feb-07 - Buy Back & Roll Out/Down - BTC 2 Feb07 50.00 Call @ -0.06 -
06-Feb-07 - Continued Trade - STO 2 Apr07 45.00 Call @ 1.39 -

This trade is an example of my revised rolling strategy of choosing the best call option, whether short or long term, based on the average premium. The Feb07 50 Call had very little time value left so I bought it back and rolled out to Apr07 and down to the 45 strike. I compared the premiums for the 45 call in Mar (1 month), Apr (2 months) & Jul (5 months). The Mar was selling for .50, the Apr for 1.40, and the Jul for 3.00. If you average out the premiums on a monthly basis, the averages are .50 for Mar, .70 for Apr, and .60 for Jul. So, I chose the Apr 45 call since it had the highest average premium.

Current Position Summary:

Stock Investment: $10,854.00
Income Generated: $2,374.00
Percent Income Generated: 21.87%
Net Profit If Called: $520.00
Percent Return If Called: 4.79%
Annualized Return If Called: 4.84%
Days to Expiration: 361 days

Trade History:

24-Apr-06 - Initial Stock Position - BTO 100 SNDK @ 59.56 -
24-Apr-06 - Initial Call Option - STO 1 Jul06 57.50 Call @ 7.09 - Closed
06-Jul-06 - Buy Back & Roll Out/Down - BTC 1 Jul06 57.50 Call @ -0.16 -
06-Jul-06 - Dollar Cost Averaging - BTO 100 SNDK @ 48.98 -
06-Jul-06 - Combined Cost Basis - $10,854.00 200 @ 54.27 -
06-Jul-06 - Continued Trade - STO 2 Oct06 55.00 Call @ 3.39 - Expired
23-Oct-06 - Continued Trade - STO 2 Jan07 55.00 Call @ 2.14 - Closed
19-Dec-06 - Buy Back & Roll Out/Down - BTC 2 Jan07 55.00 Call @ -0.16 -
19-Dec-06 - Continued Trade - STO 2 Feb07 50.00 Call @ 1.69 - Closed
06-Feb-07 - Buy Back & Roll Out/Down - BTC 2 Feb07 50.00 Call @ -0.06 -
06-Feb-07 - Continued Trade - STO 2 Apr07 45.00 Call @ 1.39 -