Sunday, January 18, 2009

TIP - Closed

The TIP Dec08 93.00 call was exercised on Fri and the stock was called away for a loss. It was DITM and I didn't want to hold it anymore. I initially selected TIP for the fixed income portion of my CC portfolio but it has very little option liquidity in terms of open interest and trading volume. This causes wide bid/ask spreads which makes it difficult to roll. I also expected to receive a nice monthly dividend from TIP, however, since we've been in a deflationary period since I bought TIP, they have not paid any dividends in the past 3 months. So, I decided to take a small loss and get out of TIP.

The following is the trade history and returns, including IB commissions.

Covered Call Results

Stock Investment: $9,724.00
Income Generated: $113.00
Net Profit: -$311.00
Percent Return: -3.20%
Annualized Return: -13.73%
Duration of Trade: 85 days

Trade History:

23-Oct-08 - Initial Stock Position - BTO 100 TIP @ 97.24 -
23-Oct-08 - Initial Call Option - STO 1 Nov08 98.00 Call @ 0.84 - Expired
24-Nov-08 - Interim Trade - STO 1 Jan09 93.00 Call @ 0.29 - Exercised
16-Jan-09 - Option Exercised - EX 1 Jan09 93.00 Call @ 93.00 -