Friday, September 7, 2007

CTSH - New Position

A new position was established today on CTSH. The following is the trade information, including IB commissions:

07-Sep-07 - Initial Stock Position - BTO 100 CTSH @ 71.26
07-Sep-07 - Initial Call Option - STO 1 Sep07 70.00 Call @ 2.89

Stock Investment: $7,126.00
Income Generated: $289.00
Percent Income Generated: 4.06%
Annualized Income Generated: 105.73%
Net Profit If Called: $163.00
Percent Return If Called: 2.29%
Annualized Return If Called: 59.64%
Days to Expiration: 14 days

Company Fundamentals - Multi-Year Median Performance

Shareholder Equity: 57.08%
Free Cash Flow: 39.05%
Return on Assets: 19.38%
Return on Equity: 26.88%
Cash Return on Invested Capital: 17.20%

This is an example of using the proceeds from the positions that were closed early, in this case EBAY & RS, to establish a new position in the same expiration month. The combined investment for EBAY & RS was $7,917.50 and the original combined profit was $337.50. By closing those positions early, once they reached over 90% of their potential profit, the profit was reduced by $29 (337.50-308.50). However, by re-investing $7,126.00 into CTSH I now have the opportunity to increase the original profit by $134 (308.50+163.00-337.50) within the same time frame.