Sunday, June 21, 2009

AXP - Adjustment

The following adjustment was made Friday on American Express (AXP):

19-Jun-09 - Option Exercised - EX 2 Jun09 17.00 Call @ 17.00 -
19-Jun-09 - Cash to Secure Put - CSP 200 AXP @ 21.00 -
19-Jun-09 - Combined Cost Basis - $10,200.00 200 @ 51.00 -
19-Jun-09 - Initial Put Position - STO 2 Jul09 21.00 Put @ 0.29 -

The Jun09 17.00 call was deep ITM and was going to be exercised after the market closed, since this was expiration Friday. In order to roll out the calls for a net credit, I would have had to average down another 100 or 200 shares, which meant an additional $2,480 or $4,960 investment. I didn't want to increase my investment in AXP by that much so I decided to try a new strategy. I would allow both calls to be exercised and then re-enter the 200 share position by selling 2 cash secured puts, in lieu of averaging down. So, in anticipation of having both Jun09 17.00 calls exercised and receiving $3,400 from the sale of 200 shares, I sold 2 Jul09 21.00 puts, secured by $4,200 in cash. This resulted in an additional investment of only $800, which was significantly less than the cost of averaging down and increased my cost basis from $9,400 to $10,200. If the Jul09 puts are assigned I'll own 200 shares of AXP again and will continue to sell calls. If not assigned, I'll continue selling puts.

Current Position Summary:

Stock Investment: $10,200.00
Income Generated: $2,414.60
Percent Income Generated: 23.67%
Annualized Income Generated: 14.47%
Net Profit If Called: -$3,585.40
Percent Return If Called: -35.15%
Annualized Return If Called: -21.49%
Days Held to Expiration: 597 days

Trade History:

28-Nov-07 - Initial Stock Position - BTO 100 AXP @ 56.74 - Called
28-Nov-07 - Initial Call Option - STO 1 Dec07 55.00 Call @ 3.21 - Expired
07-Jan-08 - Continued Trade - STO 1 Feb08 55.00 Call @ 0.69 - Expired
08-Feb-08 - Dividend Received - DIV 100 Dividend @ 0.18 -
21-Feb-08 - Interim Trade - STO 1 Apr08 50.00 Call @ 0.89 - Expired
25-Apr-08 - Interim Trade - STO 1 May08 50.00 Call @ 0.30 - Expired
09-May-08 - Dividend Received - DIV 100 Dividend @ 0.18 -
19-May-08 - Interim Trade - STO 1 Jul08 50.00 Call @ 2.65 - Expired
23-Jul-08 - Interim Trade - STO 1 Aug08 42.50 Call @ 0.60 - Expired
08-Aug-08 - Dividend Received - DIV 100 Dividend @ 0.18 -
22-Aug-08 - Interim Trade - STO 1 Sep08 42.50 Call @ 0.28 - Closed
12-Sep-08 - Buy Back & Roll Out - BTC 1 Sep08 42.50 Call @ -0.16 -
12-Sep-08 - Interim Trade - STO 1 Oct08 42.50 Call @ 0.79 - Expired
23-Sep-08 - Second Stock Position - BTO 100 AXP @ 37.26 - Called
23-Sep-08 - Combined Cost Basis - $9,400.00 200 @ 47.00 -
23-Sep-08 - Initial Call Option - STO 1 Oct08 35.00 Call @ 3.67 - Expired
20-Oct-08 - Interim Trade - STO 2 Nov08 27.50 Call @ 1.22 - Expired
10-Nov-08 - Dividend Received - DIV 200 Dividend @ 0.18 -
24-Nov-08 - Interim Trade - STO 2 Dec08 25.00 Call @ 0.54 - Expired
22-Dec-08 - Interim Trade - STO 2 Jan09 22.50 Call @ 0.31 - Expired
27-Jan-09 - Interim Trade - STO 2 Feb09 17.50 Call @ 0.66 - Expired
10-Feb-09 - Dividend Received - DIV 200 Dividend @ 0.18 -
24-Feb-09 - Interim Trade - STO 2 Mar09 15.00 Call @ 0.34 - Expired
24-Mar-09 - Interim Trade - STO 2 May09 17.50 Call @ 0.84 - Closed
04-May-09 - Buy Back and Roll Out - BTC 2 May09 17.50 Call @ -8.90 -
04-May-09 - Interim Trade - STO 2 Jun09 17.00 Call @ 9.49 - Exercised
08-May-09 - Dividend Received - DIV 200 Dividend @ 0.18 -
19-Jun-09 - Option Exercised - EX 2 Jun09 17.00 Call @ 17.00 -
19-Jun-09 - Cash to Secure Put - CSP 200 AXP @ 21.00 -
19-Jun-09 - Combined Cost Basis - $10,200.00 200 @ 51.00 -
19-Jun-09 - Initial Put Position - STO 2 Jul09 21.00 Put @ 0.29 -