The General Dynamics Corporation (GD) May11 65.00 Call was excercised and the position was closed at a loss. All prices include IB commissions.
I entered this position on 4/28/10 by selling a $75 CSP, which was above my target buy price of $60. That was my first mistake. By 7/13/10, GD had declined to $60.56 and the Aug10 $75 Put was assigned. I held it uncovered for over a month. The price continued to decline until it hit a low of $55.87 on 8/31/10. On 9/1/10 I sold the Jan11 $65 Call. Then the stock start a long uptrend, surpassing the $65 strike. I continued to roll out the $65 Call but the stock kept rising. I finally decided to let it get called away at a loss on Friday. In hindsight, I should have had the patience to wait for GD to trade near my target buy price of $60, rather than enter at $75. But given the bad entry, I should have managed the position better also, by leaving it uncovered until I could sell the $75 call for a decent premium.
Position Summary
| Cost Basis | $7,500.00 |
| Net Profit | ($313.26) |
| Percent Return | -4.18% |
| Annualized Return | -3.94% |
| Days Held to Expiration | 387 days |
Trade History
| Date | Stock | Description | Transaction | Status | Stock Investment | Income Generated |
|---|---|---|---|---|---|---|
| 4/28/2010 | GD | CSP Margin Used | CSP 100 GD @ 75.00 | ($7,500.00) | ||
| 4/28/2010 | GD | Initial Put Option | STO 1 May10 75.00 Put @ 0.99 | Closed | $98.99 | |
| 5/21/2010 | GD | Buy Back and Roll Out/Down | BTC 1 May10 75.00 Put @ -8.17 | ($816.86) | ||
| 5/21/2010 | GD | Interim Trade | STO 1 Aug10 75.00 Put @ 9.98 | Exercised | $998.14 | |
| 7/13/2010 | GD | CSP Margin Returned | CSP 100 GD @ -75.00 | $7,500.00 | ||
| 7/13/2010 | GD | Stock Assigned | EX 1 Aug10 75.00 Put @ -75.00 | ($7,500.00) | ||
| 9/1/2010 | GD | Interim Trade | STO 1 Jan11 65.00 Call @ 1.24 | Closed | $123.99 | |
| 11/12/2010 | GD | Dividend Received | DIV 100 Dividend @ 0.42 | $42.00 | ||
| 12/21/2010 | GD | Buy Back and Roll Out | BTC 1 Jan11 65.00 Call @ -5.47 | ($546.76) | ||
| 12/21/2010 | GD | Interim Trade | STO 1 May11 65.00 Call @ 6.98 | Exercised | $698.24 | |
| 2/4/2011 | GD | Dividend Received | DIV 100 Dividend @ 0.42 | $42.00 | ||
| 5/6/2011 | GD | Dividend Received | DIV 100 Dividend @ 0.47 | $47.00 | ||
| 5/20/2011 | GD | Option Exercised | EX 1 May11 65.00 Call @ 65.00 | $6,500.00 | ||
| 5/20/2011 | GD | Net Cost/Profit-Loss | ($7,500.00) | ($313.26) | ||
| DTE | 387 | Percent Profit-Loss/Annualized | -4.18% | -3.94% |
