Thursday, April 26, 2007

UPS - New VICC Position

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

26-Apr-07 - Initial Stock Position - BTO 100 UPS @ 71.93
26-Apr-07 - Initial Call Option - STO 1 May07 75.00 Call @ 0.10

Stock Investment: $7,193.00
Income Generated: $10.00
Percent Income Generated: 0.14%
Net Profit If Called: $317.00
Percent Return If Called: 4.41%
Annualized Return If Called: 73.12%
Days to Expiration: 22 days

Note that as a VICC position the primary objective is capital appreciation. The stock will be held long term until it reaches or surpasses it's fair value. Front month OTM call options are sold to bring in a small amount of income while waiting for the stock to appreciate. The calls are sold far enough OTM to avoid assignment and the need to make any mid-month adjustments.