Monday, October 31, 2011

SYK - New Position

A new CSP position was established today on Stryker Corp (SYK). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusContender
Years of Consecutive Dividend Increases18
Fair Value Estimate$63.00
Target Buy Price$44.10
Target Margin of Safety30.00%
Actual Buy Price$44.00
Actual Margin of Safety30.16%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/31/2011SYKCSP Margin UsedCSP 100 SYK @ 44.00 ($4,400.00) 
10/31/2011SYKInitial Put OptionSTO 1 Jan12 44.00 Put @ 1.25  $124.56

Position Summary

Cost Basis($4,400.00)
Income Generated$124.56
Percent Income Generated2.83%
Annualized Income Generated12.76%
Net Profit If Assigned$124.56
Percent Return If Assigned2.83%
Annualized Return If Assigned12.76%
Days Held to Expiration81 days

NVS - New Position

A new CSP position was established today on Novartis (NVS). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusContender
Years of Consecutive Dividend Increases10
Fair Value Estimate$71.00
Target Buy Price$56.80
Target Margin of Safety20.00%
Actual Buy Price$55.00
Actual Margin of Safety22.54%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/31/2011NVSCSP Margin UsedCSP 100 NVS @ 55.00 ($5,500.00) 
10/31/2011NVSInitial Put OptionSTO 1 Dec11 55.00 Put @ 1.29  $128.98

Position Summary

Cost Basis($5,500.00)
Income Generated$128.98
Percent Income Generated2.35%
Annualized Income Generated18.61%
Net Profit If Assigned$128.98
Percent Return If Assigned2.35%
Annualized Return If Assigned18.61%
Days Held to Expiration46 days

COP - New Position

A new CSP position was established today on ConocoPhillips (COP). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusContender
Years of Consecutive Dividend Increases11
Fair Value Estimate$85.00
Target Buy Price$68.00
Target Margin of Safety20.00%
Actual Buy Price$65.00
Actual Margin of Safety23.53%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/31/2011COPCSP Margin UsedCSP 100 COP @ 65.00 ($6,500.00) 
10/31/2011COPInitial Put OptionSTO 1 Jan12 65.00 Put @ 1.87  $186.97

Position Summary

Cost Basis($6,500.00)
Income Generated$186.97
Percent Income Generated2.88%
Annualized Income Generated12.96%
Net Profit If Assigned$186.97
Percent Return If Assigned2.88%
Annualized Return If Assigned12.96%
Days Held to Expiration81 days

NUE - Adjustment

The following adjustment was made today on Nucor Corporation (NUE). All prices include IB commissions.

This is the second position on NUE.

CriteriaValue
Dividend Champions StatusChampion
Years of Consecutive Dividend Increases38
Fair Value Estimate$58.00
Target Buy Price$35.00
Target Margin of Safety39.66%
Actual Buy Price$35.00
Actual Margin of Safety39.66%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/31/2011NUEContinued TradeSTO 1 Jan12 35.00 Put @ 1.47  $146.52

Current Position Summary

Cost Basis($3,500.00)
Income Generated$255.50
Percent Income Generated7.30%
Annualized Income Generated11.01%
Net Profit If Assigned$255.50
Percent Return If Assigned7.30%
Annualized Return If Assigned11.01%
Days Held to Expiration242 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011NUECSP Margin UsedCSP 100 NUE @ 35.00 ($3,500.00) 
5/23/2011NUEInitial Put OptionSTO 1 Oct11 35.00 Put @ 1.09Expired $108.98
10/31/2011NUEContinued TradeSTO 1 Jan12 35.00 Put @ 1.47  $146.52
1/20/2012NUE Totals ($3,500.00)$255.50
DTE242 Percent Income/Annualized 7.30%11.01%

MMM - Adjustment

The following adjustment was made today on 3M Company (MMM). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusChampion
Years of Consecutive Dividend Increases53
Fair Value Estimate$100.00
Target Buy Price$80.00
Target Margin of Safety20.00%
Actual Buy Price$70.00
Actual Margin of Safety30.00%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/31/2011MMMContinued TradeSTO 1 Jan12 70.00 Put @ 1.56  $155.97

Current Position Summary

Cost Basis($7,000.00)
Income Generated$246.95
Percent Income Generated3.53%
Annualized Income Generated10.64%
Net Profit If Assigned$246.95
Percent Return If Assigned3.53%
Annualized Return If Assigned10.64%
Days Held to Expiration121 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/21/2011MMMCSP Margin UsedCSP 100 MMM @ 70.00 ($7,000.00) 
9/21/2011MMMInitial Put OptionSTO 1 Oct11 70.00 Put @ 0.91Expired $90.98
10/31/2011MMMContinued TradeSTO 1 Jan12 70.00 Put @ 1.56  $155.97
1/20/2012MMM Totals ($7,000.00)$246.95
DTE121 Percent Income/Annualized 3.53%10.64%

LOW - Adjustment

The following adjustment was made today on Lowes Companies Inc (LOW) All prices include IB commissions.

This is the second position on LOW.

CriteriaValue
Dividend Champions StatusChampion
Years of Consecutive Dividend Increases48
Fair Value Estimate$36.00
Target Buy Price$25.00
Target Margin of Safety30.56%
Actual Buy Price$21.00
Actual Margin of Safety41.67%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/31/2011LOWContinued TradeSTO 2 Nov11 21.00 Put @ 0.59  $118.55

Current Position Summary

Cost Basis($4,200.00)
Income Generated$231.11
Percent Income Generated5.50%
Annualized Income Generated11.22%
Net Profit If Assigned$231.11
Percent Return If Assigned5.50%
Annualized Return If Assigned11.22%
Days Held to Expiration179 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011LOWCSP Margin UsedCSP 200 LOW @ 21.00 ($4,200.00) 
5/23/2011LOWInitial Put OptionSTO 2 Oct11 21.00 Put @ 0.56Expired $112.56
10/31/2011LOWContinued TradeSTO 2 Nov11 21.00 Put @ 0.59  $118.55
11/18/2011LOW Totals ($4,200.00)$231.11
DTE179 Percent Income/Annualized 5.50%11.22%

ABT - Adjustment

The following adjustment was made today on Abbott Laboratories (ABT). All prices include IB commissions.

This is the second position on ABT.

CriteriaValue
Dividend Champions StatusChampion
Years of Consecutive Dividend Increases38
Years of Positive Free Cash Flow (last 10 years)10
Fair Value Estimate$68.00
Target Buy Price$55.00
Target Margin of Safety20.00%
Actual Buy Price$52.50
Actual Margin of Safety22.79%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/31/2011ABTContinued TradeSTO 1 Jan12 52.50 Put @ 1.44  $144.12

Current Position Summary

Cost Basis($5,250.00)
Income Generated$436.40
Percent Income Generated8.31%
Annualized Income Generated12.33%
Net Profit If Assigned$436.40
Percent Return If Assigned8.31%
Annualized Return If Assigned12.33%
Days Held to Expiration246 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/19/2011ABTCSP Margin UsedCSP 100 ABT @ 52.50 ($5,250.00) 
5/19/2011ABTInitial Put OptionSTO 1 Jun11 52.50 Put @ 0.55Closed $55.34
6/17/2011ABTBuy Back and Roll OutBTC 1 Jun11 52.50 Put @ -0.82  ($81.97)
6/17/2011ABTContinued TradeSTO 1 Aug11 52.50 Put @ 2.19Exercised $219.03
8/19/2011ABTCSP Margin ReturnedCSP 100 ABT @ -52.50 $5,250.00 
8/19/2011ABTStock AssignedEX 1 Aug11 52.50 Put @ -52.50 ($5,250.00) 
8/24/2011ABTContinued TradeSTO 1 Oct11 52.50 Call @ 1.00Exercised $99.98
10/21/2011ABTStock CalledEX 1 Oct11 52.50 Call @ 52.50 $5,250.00($0.10)
10/24/2011ABTCSP Margin UsedCSP 100 ABT @ 52.50 ($5,250.00) 
10/31/2011ABTContinued TradeSTO 1 Jan12 52.50 Put @ 1.44  $144.12
1/20/2012ABT Totals ($5,250.00)$436.40
DTE246 Percent Income/Annualized 8.31%12.33%

Friday, October 28, 2011

MDT - Closed

The Medtronic Inc (MDT) Oct11 30.00 Put expired on 10/21. I was going to continue the position this week, but the stock went up too far, so I decided to close the position. All prices include IB commissions.

Position Summary

Cost Basis$3,000.00
Net Profit$24.98
Percent Return0.83%
Annualized Return10.13%
Days Held to Expiration30 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/21/2011MDTCSP Margin UsedCSP 100 MDT @ 30.00 ($3,000.00) 
9/21/2011MDTInitial Put OptionSTO 1 Oct11 30.00 Put @ 0.25Expired $24.98
10/21/2011MDTCSP Margin ReturnedCSP 100 MDT @ -30.00 $0.00$3,000.00
10/21/2011MDT Net Cost/Profit-Loss ($3,000.00)$24.98
DTE30 Percent Profit-Loss/Annualized 0.83%10.13%

DOV - Closed

The Dover Corp (DOV) Oct11 45.00 Put expired on 10/21. I was going to continue the position this week, but the stock went up too far, so I decided to close the position. All prices include IB commissions.

Position Summary

Cost Basis$4,500.00
Net Profit$77.98
Percent Return1.73%
Annualized Return20.40%
Days Held to Expiration31 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/20/2011DOVCSP Margin UsedCSP 100 DOV @ 45.00 ($4,500.00) 
9/20/2011DOVInitial Put OptionSTO 1 Oct11 45.00 Put @ 0.78Expired $77.98
10/21/2011DOVCSP Margin ReturnedCSP 100 DOV @ -45.00 $0.00$4,500.00
10/21/2011DOV Net Cost/Profit-Loss ($4,500.00)$77.98
DTE31 Percent Profit-Loss/Annualized 1.73%20.40%

Thursday, October 27, 2011

TBT - Adjustment

The following adjustment was made today on ProShares UltraShort 20+ Year Treasury (TBT). All prices include IB commissions.

This is the second position on TBT.

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/27/2011TBTContinued TradeSTO 2 Nov11 23.00 Call @ 0.90  $180.55

Current Position Summary

Cost Basis($4,600.00)
Income Generated$625.32
Percent Income Generated13.59%
Annualized Income Generated64.44%
Net Profit If Assigned$625.32
Percent Return If Assigned13.59%
Annualized Return If Assigned64.44%
Days Held to Expiration77 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/2/2011TBTCSP Margin UsedCSP 200 TBT @ 23.00 ($4,600.00) 
9/2/2011TBTInitial Put OptionSTO 2 Sep11 23.00 Put @ 1.04Closed $207.65
9/16/2011TBTBuy Back and Roll OutBTC 2 Sep11 23.00 Put @ -0.14  ($28.02)
9/16/2011TBTContinued TradeSTO 2 Oct11 23.00 Put @ 1.33Exercised $265.14
10/21/2011TBTCSP Margin ReturnedCSP 200 TBT @ -23.00 $4,600.00 
10/21/2011TBTStock AssignedEX 2 Oct11 23.00 Put @ -23.00 ($4,600.00) 
10/27/2011TBTContinued TradeSTO 2 Nov11 23.00 Call @ 0.90  $180.55
11/18/2011TBT Totals ($4,600.00)$625.32
DTE77 Percent Income/Annualized 13.59%64.44%

PFE - Adjustment

The following adjustment was made today on Pfizer Inc (PFE). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusFallen Angel*
Previous Years of Consecutive Dividend Increases41**
Fair Value Estimate$27.00
Target Buy Price$20.00
Target Margin of Safety25.93%
Actual Buy Price$19.00
Actual Margin of Safety29.63%

*PFE is what I classify as a Fallen Angel (i.e. former Dividend Champion). PFE cut the dividend in 2009, but has since increased it in 2010 and 2011. **Prior to cutting the dividend PFE had 41 years of consecutive dividend increases.

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/27/2011PFEContinued TradeSTO 2 Nov11 19.00 Call @ 1.01  $202.31

Current Position Summary

Cost Basis($3,800.00)
Income Generated$411.25
Percent Income Generated10.82%
Annualized Income Generated22.07%
Net Profit If Assigned$411.25
Percent Return If Assigned10.82%
Annualized Return If Assigned22.07%
Days Held to Expiration179 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011PFECSP Margin UsedCSP 200 PFE @ 19.00 ($3,800.00) 
5/23/2011PFEInitial Put OptionSTO 2 Aug11 19.00 Put @ 0.44Exercised $88.32
8/19/2011PFECSP Margin ReturnedCSP 200 PFE @ -19.00 $3,800.00 
8/19/2011PFEStock AssignedEX 2 Aug11 19.00 Put @ -19.00 ($3,800.00) 
8/29/2011PFEContinued TradeSTO 2 Sep11 19.00 Call @ 0.39Expired $78.31
9/20/2011PFEContinued TradeSTO 2 Oct11 19.00 Call @ 0.21Expired $42.31
10/27/2011PFEContinued TradeSTO 2 Nov11 19.00 Call @ 1.01  $202.31
11/18/2011PFE Totals ($3,800.00)$411.25
DTE179 Percent Income/Annualized 10.82%22.07%

GE - Adjustment

The following adjustment was made today on General Electric (GE). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusFallen Angel*
Previous Years of Consecutive Dividend Increases32**
Fair Value Estimate$25.00
Target Buy Price$20.00
Target Margin of Safety20.00%
Actual Buy Price$18.00
Actual Margin of Safety28.00%

*GE is what I classify as a Fallen Angel (i.e. former Dividend Champion). GE cut the dividend in 2009, but has since increased it in 2010 and 2011. **Prior to cutting the dividend PFE had 32 years of consecutive dividend increases.

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/27/2011GEContinued TradeSTO 2 Dec11 18.00 Call @ 0.40  $79.15

Current Position Summary

Cost Basis($3,600.00)
Income Generated$208.31
Percent Income Generated5.79%
Annualized Income Generated10.20%
Net Profit If Assigned$208.31
Percent Return If Assigned5.79%
Annualized Return If Assigned10.20%
Days Held to Expiration207 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011GECSP Margin UsedCSP 200 GE @ 18.00 ($3,600.00) 
5/23/2011GEInitial Put OptionSTO 2 Aug11 18.00 Put @ 0.50Exercised $99.16
8/19/2011GECSP Margin ReturnedCSP 2 @ 18.00 $3,600.00 
8/19/2011GEStock AssignedEX 2 Aug11 18.00 Put @ -18.00 ($3,600.00) 
10/25/2011GEDividend ReceivedDIV 200 Dividend @ 0.15  $30.00
10/27/2011GEContinued TradeSTO 2 Dec11 18.00 Call @ 0.40  $79.15
12/16/2011GE Totals ($3,600.00)$208.31
DTE207 Percent Income/Annualized 5.79%10.20%

FDX - Adjustment

The following adjustment was made today on FedEx Corporation (FDX). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusChallenger
Years of Consecutive Dividend Increases9
Fair Value Estimate$112.00
Target Buy Price$78.40
Target Margin of Safety30.00%
Actual Buy Price$80.00
Actual Margin of Safety28.57%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/27/2011FDXContinued TradeSTO 1 Nov11 85.00 Call @ 2.56  $255.97

Current Position Summary

Cost Basis($8,000.00)
Income Generated$511.31
Percent Income Generated6.39%
Annualized Income Generated13.03%
Net Profit If Assigned$1,011.31
Percent Return If Assigned12.64%
Annualized Return If Assigned25.78%
Days Held to Expiration179 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011FDXCSP Margin UsedCSP 100 FDX @ 80.00 ($8,000.00) 
5/23/2011FDXInitial Put OptionSTO 1 Oct11 80.00 Put @ 2.55Exercised $255.34
10/21/2011FDXCSP Margin ReturnedCSP 100 FDX @ -80.00 $8,000.00 
10/21/2011FDXStock AssignedEX 1 Oct11 80.00 Put @ -80.00 ($8,000.00) 
10/27/2011FDXContinued TradeSTO 1 Nov11 85.00 Call @ 2.56  $255.97
11/18/2011FDX Totals ($8,000.00)$511.31
DTE179 Percent Income/Annualized 6.39%13.03%

Wednesday, October 26, 2011

GD - Closed

The General Dynamics Corporation (GD) Oct11 65.00 Call was excercised on Friday. I was waiting until earnings announcement today to determine whether to continue the position as a CSP or close it. Since GD is now trading below the 65.00 strike, I decided to close the position. All prices include IB commissions.

Position Summary

Cost Basis$6,500.00
Net Profit$247.83
Percent Return3.81%
Annualized Return9.22%
Days Held to Expiration151 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011GDCSP Margin UsedCSP 100 GD @ 65.00 ($6,500.00) 
5/23/2011GDInitial Put OptionSTO 1 Aug11 65.00 Put @ 1.14Exercised $113.98
8/19/2011GDCSP Margin ReturnedCSP 100 GD @ -65.00 $6,500.00 
8/19/2011GDStock AssignedEX 1 Aug11 65.00 Put @ -65.00 ($6,500.00)$0.00
8/24/2011GDContinued TradeSTO 1 Oct11 65.00 Call @ 1.34Exercised$0.00$133.97
10/21/2011GDStock CalledEX 1 Oct11 65.00 Call @ 65.00 $0.00$6,499.88
10/21/2011GD Net Cost/Profit-Loss ($6,500.00)$247.83
DTE151 Percent Profit-Loss/Annualized 3.81%9.22%

Sunday, October 23, 2011

XOM - Closed

The Exxon Mobil Corp (XOM) Oct11 67.50 Put expired and the position was closed. All prices include IB commissions.

Closed Position Summary

Cost Basis$6,750.00
Net Profit$108.28
Percent Return1.60%
Annualized Return19.52%
Days Held to Expiration30 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/21/2011XOMCSP Margin UsedCSP 100 XOM @ 67.50 ($6,750.00) 
9/21/2011XOMInitial Put OptionSTO 1 Oct11 67.50 Put @ 1.08Expired $108.28
10/21/2011XOMCSP Margin ReturnedCSP 100 XOM @ -67.50 $0.00$6,750.00
10/21/2011XOM Net Cost/Profit-Loss ($6,750.00)$108.28
DTE30 Percent Profit-Loss/Annualized 1.60%19.52%

TLT - Closed

The iShares 20+ Year Treasury Bond Fund (TLT) Oct11 98.00 Put expired and the position was closed. All prices include IB commissions.

Position Summary

Cost Basis$9,800.00
Net Profit$914.28
Percent Return9.33%
Annualized Return8.91%
Days Held to Expiration382 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/4/2010TLTCSP Margin UsedCSP 100 TLT @ 98.00 ($9,800.00) 
10/4/2010TLTInitial Put OptionSTO 1 Nov10 98.00 Put @ 0.49Closed $48.99
11/18/2010TLTBuy Back and Roll OutBTC 1 Nov10 98.00 Put @ -2.25  ($224.96)
11/18/2010TLTContinued TradeSTO 1 Dec10 98.00 Put @ 3.39Closed$0.00$339.04
12/8/2010TLTBuy Back and Roll OutBTC 1 Dec10 98.00 Put @ -4.96  ($495.96)
12/8/2010TLTContinued TradeSTO 1 Jan11 98.00 Put @ 5.74Closed$0.00$573.99
12/28/2010TLTBuy Back and Roll OutBTC 1 Jan11 98.00 Put @ -6.71  ($670.96)
12/28/2010TLTContinued TradeSTO 1 Mar11 98.00 Put @ 7.84Closed$0.00$784.04
3/18/2011TLTBuy Back and Roll OutBTC 1 Mar11 98.00 Put @ -4.81  ($481.01)
3/18/2011TLTContinued TradeSTO 1 Jun11 98.00 Put @ 6.82Closed$0.00$681.87
6/17/2011TLTBuy Back and Roll OutBTC 1 Jun11 98.00 Put @ -1.03  ($103.02)
6/17/2011TLTContinued TradeSTO 1 Aug11 98.00 Put @ 3.49Expired$0.00$348.98
8/24/2011TLTContinued TradeSTO 1 Oct11 98.00 Put @ 1.13Expired$0.00$113.28
10/21/2011TLTCSP Margin ReturnedCSP 100 TLT @ -98.00 $0.00$9,800.00
10/21/2011TLT Net Cost/Profit-Loss ($9,800.00)$914.28
DTE382 Percent Profit-Loss/Annualized 9.33%8.91%

PG - Closed

The Procter and Gamble (PG) Oct11 57.50 Put expired and the position was closed. All prices include IB commissions.

Position Summary

Cost Basis$5,750.00
Net Profit$71.36
Percent Return1.24%
Annualized Return15.62%
Days Held to Expiration29 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/22/2011PGCSP Margin UsedCSP 100 PG @ 57.50 ($5,750.00) 
9/22/2011PGInitial Put OptionSTO 1 Oct11 57.50 Put @ 0.71Expired $71.36
10/21/2011PGCSP Margin ReturnedCSP 100 PG @ -57.50 $0.00$5,750.00
10/21/2011PG Net Cost/Profit-Loss ($5,750.00)$71.36
DTE29 Percent Profit-Loss/Annualized 1.24%15.62%

NVS - Closed

The Novartis (NVS) Oct11 52.50 Put expired and the position was closed. All prices include IB commissions.

Position Summary

Cost Basis$5,250.00
Net Profit$90.98
Percent Return1.73%
Annualized Return21.08%
Days Held to Expiration30 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/21/2011NVSCSP Margin UsedCSP 100 NVS @ 52.50 ($5,250.00) 
9/21/2011NVSInitial Put OptionSTO 1 Oct11 52.50 Put @ 0.91Expired $90.98
10/21/2011NVSCSP Margin ReturnedCSP 100 NVS @ -52.50 $0.00$5,250.00
10/21/2011NVS Net Cost/Profit-Loss ($5,250.00)$90.98
DTE30 Percent Profit-Loss/Annualized 1.73%21.08%

JNJ - Closed

The Johnson and Johnson (JNJ) Oct11 60.00 Put expired and the position was closed. All prices include IB commissions.

Position Summary

Cost Basis$6,000.00
Net Profit$133.98
Percent Return2.23%
Annualized Return5.40%
Days Held to Expiration151 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011JNJCSP Margin UsedCSP 100 JNJ @ 60.00 ($6,000.00) 
5/23/2011JNJInitial Put OptionSTO 1 Oct11 60.00 Put @ 1.34Expired $133.98
10/21/2011JNJCSP Margin ReturnedCSP 100 JNJ @ -60.00 $0.00$6,000.00
10/21/2011JNJ Net Cost/Profit-Loss ($6,000.00)$133.98
DTE151 Percent Profit-Loss/Annualized 2.23%5.40%

COP - Closed

The ConocoPhillips (COP) Oct11 55.00 Put expired and the position was closed. All prices include IB commissions.

Position Summary

Cost Basis$5,500.00
Net Profit$79.98
Percent Return1.45%
Annualized Return18.30%
Days Held to Expiration29 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/22/2011COPCSP Margin UsedCSP 100 COP @ 55.00 ($5,500.00) 
9/22/2011COPInitial Put OptionSTO 1 Oct11 55.00 Put @ 0.80Expired $79.98
10/21/2011COPCSP Margin ReturnedCSP 100 COP @ -55.00 $0.00$5,500.00
10/21/2011COP Net Cost/Profit-Loss ($5,500.00)$79.98
DTE29 Percent Profit-Loss/Annualized 1.45%18.30%

BDX - Closed

The Becton Dickinson and Company (BDX) Oct 65.00 Put expired and the position was closed. All prices include IB commissions.

Position Summary

Cost Basis$6,500.00
Net Profit$33.98
Percent Return0.52%
Annualized Return6.36%
Days Held to Expiration30 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
9/21/2011BDXCSP Margin UsedCSP 100 BDX @ 65.00 ($6,500.00) 
9/21/2011BDXInitial Put OptionSTO 1 Oct11 65.00 Put @ 0.34Expired $33.98
10/21/2011BDXCSP Margin ReturnedCSP 100 BDX @ -65.00 $0.00$6,500.00
10/21/2011BDX Net Cost/Profit-Loss ($6,500.00)$33.98
DTE30 Percent Profit-Loss/Annualized 0.52%6.36%

Thursday, October 20, 2011

NUE - Adjustment

The following adjustment was made today on Nucor Corporation (NUE). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusChampion
Years of Consecutive Dividend Increases38
Years of Positive Free Cash Flow (last 10 years)10
Fair Value Estimate$58.00
Target Buy Price$34.80
Target Margin of Safety40.00%
Actual Buy Price$40.00
Actual Margin of Safety31.03%

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/19/2011NUECSP Margin ReturnedCSP 100 NUE @ -40.00 $4,000.00 
10/19/2011NUEStock AssignedEX 1 Oct11 40.00 Put @ -40.00 ($4,000.00) 
10/20/2011NUEContinued TradeSTO 1 Jan12 40.00 Call @ 0.89  $89.36

Current Position Summary

Cost Basis($4,000.00)
Income Generated$403.30
Percent Income Generated10.08%
Annualized Income Generated14.96%
Net Profit If Assigned$403.30
Percent Return If Assigned10.08%
Annualized Return If Assigned14.96%
Days Held to Expiration246 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/19/2011NUECSP Margin UsedCSP 100 NUE @ 40.00 ($4,000.00) 
5/19/2011NUEInitial Put OptionSTO 1 Jun11 40.00 Put @ 0.35Closed $34.98
6/17/2011NUEBuy Back and Roll OutBTC 1 Jun11 40.00 Put @ -0.75  ($75.02)
6/17/2011NUEContinued TradeSTO 1 Oct11 40.00 Put @ 3.54Exercised $353.98
10/19/2011NUECSP Margin ReturnedCSP 100 NUE @ -40.00 $4,000.00 
10/19/2011NUEStock AssignedEX 1 Oct11 40.00 Put @ -40.00 ($4,000.00) 
10/20/2011NUEContinued TradeSTO 1 Jan12 40.00 Call @ 0.89  $89.36
1/20/2012NUE Totals ($4,000.00)$403.30
DTE246 Percent Income/Annualized 10.08%14.96%

Monday, October 17, 2011

Covered Call Trading Plan History

The following is a history of changes to my covered call trading plan.

Jan 2014 Version 14 - This version has a new objective and reporting methodology which focuses on the monthly return of invested capital, excluding univested cash, which may be used for other strategies or transfered to other accounts.

Dec 2012 Version 13 - This version has a new income and capital appreciation objective and will no longer measure results against a market benchmark. Instead the results will be measure based on whether the objectives were met or not. I'll also be simplifying the format of the monthly returns to reflect this change. In addition, I also updated the stock selection with specific criteria for each type of stock used, and eliminated all non-critical information.

Oct 2011 Version 12 - Added screening process and minimum monthy premium requirement for CSP's and CC's, and made some minor changes to other sections.

Jul 2010 Version 11 - This version has a new objective of income generation and capital appreciation, and a new investment strategy. This goes along with the new format for reporting returns using financial statements that track Return on Assest (ROA) and Cash Return on Invested Capital (CROIC).

Oct 2009 Version 10 - Positions will now be held long term, alternating between covered calls (CC) and cash secured puts (CSP), as one continuous position. Positions will only be closed if the company no longer meets the requirements.

May 2009 Version 9 - Added two cash secured put strategies to be used in lieu of averaging down.

Oct 2008 Version 8 - Changed asset allocation from 80-90% Equities and 10-20% Cash to 80% Equities, 10% Fixed Income, and 10% Cash.

May 2008 Version 7 - Refined my exit strategy to identify positions where there's been a fundamental breakdown in the company and to determine if the position is meeting the minimum Annualized Yield on Cost of 12%.

Feb 2008 Version 6 - Revised investment plan to focus on dividend paying companies and added detailed position management strategy. The Value Investing Covered Calls (VICC) investment plan has been deleted. Positions are limited to dividend paying companies. When looking for new positions, the ex-dividend date is used. Those companies with ex-dividend dates coming up before the next options expiration will be selected for further analysis.

June 2007 Version 5 - Lowered downside protection from 10-12% to a minimum of 2+% and added criteria for an annualized if not assigned percentage of 24%, in order to find more short-term (1-2 months) positions.

January 2007 Version 4 - Switch to Value Line Daily Options Survey and continued to use Morningstar for trade selection. Lowered downside protection and annualized return if called to 10%/20% in order to find more trades.

August 2006 Version 3 - Switched to a value investing approach using fundamental analysis. No longer used technical analysis. Used Morningstar and PowerOptions for trade selection.

March 2006 Version 2 - Switched to longer term covered calls providing 12% downside protection and 24% annualized return if called. Changed position management to average down (dollar cost averaging) on declining stocks to lower the cost basis.

May 2005 Version 1 - Initial investment plan. Sell front month covered calls. Used MSN Money Central and PowerOptions for trade selection. Used technical analysis, using a 3 year weekly MSN chart with price channel and On Balance Volume (OBV), to find stocks that were range bound or in an uptrend, near the bottom of the price channel and rising OBV.