Thursday, June 25, 2009

NSC - New Position

A new position was established today on Norfolk Southern Corp (NSC). The following is the trade information, including IB commissions:

25-Jun-09 - Initial Put Option - STO 1 Jul09 38.00 Put @ 1.10
25-Jun-09 - Cash to Secure Put - CSP 100 NSC @ 38.00

Norfolk Southern Corp is a fundamentally solid narrow moat company, with 8 out of 10 years of positive cash flow, and 7 consecutive years of dividend increases.

I analyzed doing either a covered call (CC) or a cash secured put (CSP) and decided to do the CSP, since it had a slightly better profit than the CC.

Cash to Secure Put: $3,800.00
Income Generated: $110.00
Percent Income Generated: 2.89%
Annualized Income Generated: 48.03%
Net Profit If Expired: $110.00
Percent Return If Expired: 2.89%
Annualized Return If Expired: 48.03%
Days Held to Expiration: 22 days