A new CSP position was established today on SPDR S&P 500 ETF (SPY). All prices include IB commissions.
This position represents a new strategy for idle cash. The idea is to earn interest at the current 10 Year Treasury rate (2.05%) or more for a period of 1 year or less. I chose the lowest possible strike and shortest expiration that met the criteria. The 85 strike provides 35% downside protection at the current price through Dec 2012, and is at a multi-year support level. This seems like a pretty safe bet and it beats leaving cash in the account at zero interest.
| Date | Stock | Description | Transaction | Status | Stock Investment | Income Generated |
|---|---|---|---|---|---|---|
| 1/24/2012 | SPY | CSP Margin Used | CSP 100 SPY @ 85.00 | ($8,500.00) | ||
| 1/24/2012 | SPY | Initial Put Option | STO 1 Dec12 85.00 Put @ 1.63 | $162.97 |
Position Summary
| Cost Basis | ($8,500.00) |
| Income Generated | $162.97 |
| Percent Income Generated | 1.92% |
| Annualized Income Generated | 2.11% |
| Net Profit If Assigned | $162.97 |
| Percent Return If Assigned | 1.92% |
| Annualized Return If Assigned | 2.11% |
| Days Held to Expiration | 332 days |
