The SNDK May08 25.00 Call was ITM so the following adjustment was made today to avoid possible assignment:
29-Apr-08 - Buy Back & Roll Out/Up - BTC 2 May08 25.00 Call @ -2.35 -
29-Apr-08 - Interim Trade - STO 2 Jul08 30.00 Call @ 1.38 -
This traded resulted in a net debit of $0.97/share. I normally try to roll out for a net credit, which would have meant going out farther in time and possibly buying additional shares. However, since this is a non-dividend paying position I didn't want to add more funds to the position or go out too far in time. So I decided to roll out/up to the Jul08 25.00 Call, which was the second OTM strike available but still below my original cost basis. I chose the Jul08 expiration since this is an interim trade and I'll be on vacation during June expiration.
Current Position Summary:
Stock Investment: $10,854.00
Income Generated: $3,604.80
Percent Income Generated: 33.21%
Annualized Income Generated: 14.86%
Net Profit If Called: -$1,249.20
Percent Return If Called: -11.51%
Annualized Return If Called: -5.15%
Days Held to Expiration: 816 days
Trade History:
24-Apr-06 - Initial Stock Position - BTO 100 SNDK @ 59.56 -
24-Apr-06 - Initial Call Option - STO 1 Jul06 57.50 Call @ 7.09 - Closed
06-Jul-06 - Buy Back & Roll Out/Down - BTC 1 Jul06 57.50 Call @ -0.16 -
06-Jul-06 - Dollar Cost Averaging - BTO 100 SNDK @ 48.98 -
06-Jul-06 - Combined Cost Basis - $10,854.00 200 @ 54.27 -
06-Jul-06 - Continued Trade - STO 2 Oct06 55.00 Call @ 3.39 - Expired
23-Oct-06 - Continued Trade - STO 2 Jan07 55.00 Call @ 2.14 - Closed
19-Dec-06 - Buy Back & Roll Out/Down - BTC 2 Jan07 55.00 Call @ -0.16 -
19-Dec-06 - Continued Trade - STO 2 Feb07 50.00 Call @ 1.69 - Closed
06-Feb-07 - Buy Back & Roll Out/Down - BTC 2 Feb07 50.00 Call @ -0.06 -
06-Feb-07 - Interim Trade - STO 2 Apr07 45.00 Call @ 1.39 - Expired
27-Apr-07 - Interim Trade - STO 2 May07 45.00 Call @ 0.84 - Expired
21-May-07 - Interim Trade - STO 2 Jun07 45.00 Call @ 0.98 - Closed
15-Jun-07 - Buy Back & Roll Out/Up - BTC 2 Jun07 45.00 Call @ -1.46 -
15-Jun-07 - Continued Trade - STO 2 Oct07 50.00 Call @ 2.60 - Expired
22-Oct-07 - Continued Trade - STO 2 Nov07 45.00 Call @ 1.64 - Expired
20-Nov-07 - Continued Trade - STO 2 Dec07 40.00 Call @ 0.67 - Expired
14-Jan-08 - Interim Trade - STO 2 Feb08 35.00 Call @ 0.85 - Expired
21-Feb-08 - Interim Trade - STO 2 Mar08 30.00 Call @ 0.24 - Expired
25-Mar-08 - Interim Trade - STO 2 May08 25.00 Call @ 0.74 - Closed
29-Apr-08 - Buy Back & Roll Out/Up - BTC 2 May08 25.00 Call @ -2.35 -
29-Apr-08 - Interim Trade - STO 2 Jul08 30.00 Call @ 1.38 -
Tuesday, April 29, 2008
NTES - Adjustment
The NTES May08 20.00 Call was ITM so the following adjustment was made today to avoid possible assignment:
29-Apr-08 - Buy Back & Roll Out/Up - BTC 4 May08 20.00 Call @ -2.52 -
29-Apr-08 - Continued Trade - STO 4 Jun08 25.00 Call @ 0.68 -
This traded resulted in a net debit of $1.84/share. I normally try to roll out for a net credit, which would have meant going out farther in time and possibly buying additional shares. However, since this is a non-dividend paying position I didn't want to add more funds to the position or go out too far in time. So I decided to roll out/up to the Jun08 25.00 Call, which was the second OTM strike available that was above my original cost basis.
Current Position Summary:
Stock Investment: $9,694.00
Income Generated: $3,699.80
Percent Income Generated: 38.17%
Annualized Income Generated: 16.93%
Net Profit If Called: $4,005.80
Percent Return If Called: 41.32%
Annualized Return If Called: 18.33%
Days to Expiration: 823 days
Trade History:
20-Mar-06 - Initial Stock Position - BTO 100 NTES @ 96.94 - 4-1 Split
20-Mar-06 - Initial Call Option - STO 1 Jun06 85.00 Call @ 15.29 - 4-1 Split
28-Mar-06 - Split Stock Position - SPLT 400 NTES @ 24.24 -
28-Mar-06 - Split Call Option - SPLT 4 Jun06 21.25 Call @ 3.82 - Expired
26-Jun-06 - Continued Trade - STO 4 Jan07 22.50 Call @ 3.19 - Closed
23-Oct-06 - Buy Back & Roll Out/Down - BTC 4 Jan07 22.50 Call @ -0.16 -
23-Oct-06 - Continued Trade - STO 4 Jan07 18.75 Call @ 0.69 - Closed
17-Jan-07 - Buy Back & Roll Out/Up - BTC 4 Jan07 18.75 Call @ -0.41 -
17-Jan-07 - Continued Trade - STO 4 Mar07 20.00 Call @ 0.99 - Expired
19-Mar-07 - Interim Trade - STO 4 Apr07 20.00 Call @ 0.19 - Expired
23-Apr-07 - Interim Trade - STO 4 May07 20.00 Call @ 0.19 - Expired
21-May-07 - Interim Trade - STO 4 Jun07 20.00 Call @ 0.34 - Expired
19-Jun-07 - Interim Trade - STO 4 Sep07 20.00 Call @ 0.32 - Expired
24-Sep-07 - Continued Trade - STO 4 Dec07 20.00 Call @ 0.67 - Expired
24-Jan-08 - Continued Trade - STO 4 Mar08 20.00 Call @ 0.74 - Expired
25-Mar-08 - Continued Trade - STO 4 May08 20.00 Call @ 0.48 - Closed
29-Apr-08 - Buy Back & Roll Out/Up - BTC 4 May08 20.00 Call @ -2.52 -
29-Apr-08 - Continued Trade - STO 4 Jun08 25.00 Call @ 0.68 -
29-Apr-08 - Buy Back & Roll Out/Up - BTC 4 May08 20.00 Call @ -2.52 -
29-Apr-08 - Continued Trade - STO 4 Jun08 25.00 Call @ 0.68 -
This traded resulted in a net debit of $1.84/share. I normally try to roll out for a net credit, which would have meant going out farther in time and possibly buying additional shares. However, since this is a non-dividend paying position I didn't want to add more funds to the position or go out too far in time. So I decided to roll out/up to the Jun08 25.00 Call, which was the second OTM strike available that was above my original cost basis.
Current Position Summary:
Stock Investment: $9,694.00
Income Generated: $3,699.80
Percent Income Generated: 38.17%
Annualized Income Generated: 16.93%
Net Profit If Called: $4,005.80
Percent Return If Called: 41.32%
Annualized Return If Called: 18.33%
Days to Expiration: 823 days
Trade History:
20-Mar-06 - Initial Stock Position - BTO 100 NTES @ 96.94 - 4-1 Split
20-Mar-06 - Initial Call Option - STO 1 Jun06 85.00 Call @ 15.29 - 4-1 Split
28-Mar-06 - Split Stock Position - SPLT 400 NTES @ 24.24 -
28-Mar-06 - Split Call Option - SPLT 4 Jun06 21.25 Call @ 3.82 - Expired
26-Jun-06 - Continued Trade - STO 4 Jan07 22.50 Call @ 3.19 - Closed
23-Oct-06 - Buy Back & Roll Out/Down - BTC 4 Jan07 22.50 Call @ -0.16 -
23-Oct-06 - Continued Trade - STO 4 Jan07 18.75 Call @ 0.69 - Closed
17-Jan-07 - Buy Back & Roll Out/Up - BTC 4 Jan07 18.75 Call @ -0.41 -
17-Jan-07 - Continued Trade - STO 4 Mar07 20.00 Call @ 0.99 - Expired
19-Mar-07 - Interim Trade - STO 4 Apr07 20.00 Call @ 0.19 - Expired
23-Apr-07 - Interim Trade - STO 4 May07 20.00 Call @ 0.19 - Expired
21-May-07 - Interim Trade - STO 4 Jun07 20.00 Call @ 0.34 - Expired
19-Jun-07 - Interim Trade - STO 4 Sep07 20.00 Call @ 0.32 - Expired
24-Sep-07 - Continued Trade - STO 4 Dec07 20.00 Call @ 0.67 - Expired
24-Jan-08 - Continued Trade - STO 4 Mar08 20.00 Call @ 0.74 - Expired
25-Mar-08 - Continued Trade - STO 4 May08 20.00 Call @ 0.48 - Closed
29-Apr-08 - Buy Back & Roll Out/Up - BTC 4 May08 20.00 Call @ -2.52 -
29-Apr-08 - Continued Trade - STO 4 Jun08 25.00 Call @ 0.68 -
MHP - Adjustment
The following adjustment was made today on MHP:
29-Apr-08 - Continued Trade - STO 1 May08 40.00 Call @ 1.69 -
The Apr08 40.00 Call expired worthless and I waited until after today's earnings announcement before selling another call.
Current Position Summary:
Stock Investment: $4,117.00
Income Generated: $471.00
Percent Income Generated: 11.44%
Annualized Income Generated: 49.71%
Net Profit If Called: $354.00
Percent Return If Called: 8.60%
Annualized Return If Called: 37.36%
Days Held to Expiration: 84 days
Trade History:
22-Feb-08 - Initial Stock Position - BTO 100 MHP @ 41.17 -
22-Feb-08 - Initial Call Option - STO 1 Apr08 40.00 Call @ 2.80 - Expired
12-Mar-08 - Dividend Received - DIV 100 Dividend @ 0.22 -
29-Apr-08 - Continued Trade - STO 1 May08 40.00 Call @ 1.69 -
29-Apr-08 - Continued Trade - STO 1 May08 40.00 Call @ 1.69 -
The Apr08 40.00 Call expired worthless and I waited until after today's earnings announcement before selling another call.
Current Position Summary:
Stock Investment: $4,117.00
Income Generated: $471.00
Percent Income Generated: 11.44%
Annualized Income Generated: 49.71%
Net Profit If Called: $354.00
Percent Return If Called: 8.60%
Annualized Return If Called: 37.36%
Days Held to Expiration: 84 days
Trade History:
22-Feb-08 - Initial Stock Position - BTO 100 MHP @ 41.17 -
22-Feb-08 - Initial Call Option - STO 1 Apr08 40.00 Call @ 2.80 - Expired
12-Mar-08 - Dividend Received - DIV 100 Dividend @ 0.22 -
29-Apr-08 - Continued Trade - STO 1 May08 40.00 Call @ 1.69 -
FTEK - Adjustment
The FTEK May08 22.50 Call was ITM so the following adjustment was made today to avoid possible assignment:
29-Apr-08 - Buy Back & Roll Out/Up - BTC 1 May08 22.50 Call @ -3.91 -
29-Apr-08 - Continued Trade - STO 1 Jun08 30.00 Call @ 0.69 -
This traded resulted in a net debit of $3.22/share. I normally try to roll out for a net credit, which would have meant going out farther in time and possibly buying additional shares. However, since this is a non-dividend paying position I didn't want to add more funds to the position or go out too far in time. So I decided to roll out/up to the Jun08 30.00 Call, which was the first OTM strike available that was above my original cost basis.
Current Position Summary:
Stock Investment: $2,839.00
Income Generated: $159.00
Percent Income Generated: 5.60%
Annualized Income Generated: 5.57%
Net Profit If Called: $320.00
Percent Return If Called: 11.27%
Annualized Return If Called: 11.21%
Days Held to Expiration: 367 days
Trade History:
19-Jun-07 - Initial Stock Position - BTO 100 FTEK @ 28.39 -
19-Jun-07 - Initial Call Option - STO 1 Dec07 30.00 Call @ 3.29 - Expired
07-Jan-08 - Continued Trade - STO 1 Feb08 25.00 Call @ 0.34 - Expired
21-Feb-08 - Interim Trade - STO 1 Mar08 22.50 Call @ 0.44 - Expired
25-Mar-08 - Interim Trade - STO 1 May08 22.50 Call @ 0.74 - Closed
29-Apr-08 - Buy Back & Roll Out/Up - BTC 1 May08 22.50 Call @ -3.91 -
29-Apr-08 - Continued Trade - STO 1 Jun08 30.00 Call @ 0.69 -
29-Apr-08 - Buy Back & Roll Out/Up - BTC 1 May08 22.50 Call @ -3.91 -
29-Apr-08 - Continued Trade - STO 1 Jun08 30.00 Call @ 0.69 -
This traded resulted in a net debit of $3.22/share. I normally try to roll out for a net credit, which would have meant going out farther in time and possibly buying additional shares. However, since this is a non-dividend paying position I didn't want to add more funds to the position or go out too far in time. So I decided to roll out/up to the Jun08 30.00 Call, which was the first OTM strike available that was above my original cost basis.
Current Position Summary:
Stock Investment: $2,839.00
Income Generated: $159.00
Percent Income Generated: 5.60%
Annualized Income Generated: 5.57%
Net Profit If Called: $320.00
Percent Return If Called: 11.27%
Annualized Return If Called: 11.21%
Days Held to Expiration: 367 days
Trade History:
19-Jun-07 - Initial Stock Position - BTO 100 FTEK @ 28.39 -
19-Jun-07 - Initial Call Option - STO 1 Dec07 30.00 Call @ 3.29 - Expired
07-Jan-08 - Continued Trade - STO 1 Feb08 25.00 Call @ 0.34 - Expired
21-Feb-08 - Interim Trade - STO 1 Mar08 22.50 Call @ 0.44 - Expired
25-Mar-08 - Interim Trade - STO 1 May08 22.50 Call @ 0.74 - Closed
29-Apr-08 - Buy Back & Roll Out/Up - BTC 1 May08 22.50 Call @ -3.91 -
29-Apr-08 - Continued Trade - STO 1 Jun08 30.00 Call @ 0.69 -
Monday, April 28, 2008
Today's Trades
I closed 3 positions for a loss today, CHS, GGC, & SHFL, as a result of my new review process based on fair value, margin of safety, and yield on cost. These positions were closed for the following reasons:
1. The companies had their fair value lowered more than once since they were purchased, indicating a fundamental breakdown in the company.
2. My adjusted cost basis for each position was at or above the current fair value price, which provided no margin of safety.
3. The stock prices had fallen below $10, which made it very difficult to sell sufficient premium to satisfy the yield on cost requirement.
In hindsight, if I had used this review process earlier I would have closed these positions a long time ago and probably wouldn't have suffered such a large loss on each position. Lesson learned!
Fortunately, I limit all of my positions to a maximum of 5% of total capital. These 3 positions represented between 1-2% of total capital per position, making the combined loss less than 3% of total capital. This is why position sizing is critical. I could have further reduced the loss by going through this review process before averaging down on each position. Had I done that, I might not have invested more funds into these positions and may have just closed them. Another lesson learned!
On the bright side, now I have a better process for deciding whether or not to average down and to weed out under performing positions. In the future, I won't hesitate in closing a position, even at a loss, if it fails to pass this review, just like I didn't hesitate today.
1. The companies had their fair value lowered more than once since they were purchased, indicating a fundamental breakdown in the company.
2. My adjusted cost basis for each position was at or above the current fair value price, which provided no margin of safety.
3. The stock prices had fallen below $10, which made it very difficult to sell sufficient premium to satisfy the yield on cost requirement.
In hindsight, if I had used this review process earlier I would have closed these positions a long time ago and probably wouldn't have suffered such a large loss on each position. Lesson learned!
Fortunately, I limit all of my positions to a maximum of 5% of total capital. These 3 positions represented between 1-2% of total capital per position, making the combined loss less than 3% of total capital. This is why position sizing is critical. I could have further reduced the loss by going through this review process before averaging down on each position. Had I done that, I might not have invested more funds into these positions and may have just closed them. Another lesson learned!
On the bright side, now I have a better process for deciding whether or not to average down and to weed out under performing positions. In the future, I won't hesitate in closing a position, even at a loss, if it fails to pass this review, just like I didn't hesitate today.
WFMI - Adjustment
The following adjustment was made today on WFMI:
28-Apr-08 - Buy Back & Roll Down - BTC 2 May08 45.00 Call @ -0.06 -
28-Apr-08 - Interim Trade - STO 2 May08 34.00 Call @ 0.53 -
Current Position Summary:
Stock Investment: $8,563.00
Income Generated: $1,298.90
Percent Income Generated: 15.17%
Annualized Income Generated: 14.23%
Net Profit If Called: -$464.10
Percent Return If Called: -5.42%
Annualized Return If Called: -5.09%
Days Held to Expiration: 389 days
Trade History:
23-Apr-07 - Initial Stock Position - BTO 100 WFMI @ 47.19 - VICC
23-Apr-07 - Initial Call Option - STO 1 May07 50.00 Call @ 0.83 - Expired
21-May-07 - Interim Trade - STO 1 Jul07 45.00 Call @ 0.24 - Closed
21-Jun-07 - Buy Back and Roll Out - BTC 1 Jul07 45.00 Call @ -0.03 -
21-Jun-07 - Dollar Cost Averaging - BTO 100 WFMI @ 38.44 -
21-Jun-07 - Combined Cost Basis - $8,563.00 200 @ 42.82 -
21-Jun-07 - Continued Trade - STO 2 Aug07 45.00 Call @ 0.29 - Expired
24-Jul-07 - Dividend Received - DIV 200 Dividend @ 0.18 -
20-Aug-07 - Continued Trade - STO 2 Sep07 50.00 Call @ 0.20 - Expired
24-Sep-07 - Continued Trade - STO 2 Oct07 50.00 Call @ 0.16 - Expired
22-Oct-07 - Continued Trade - STO 2 Dec07 50.00 Call @ 2.64 - Expired
14-Jan-08 - Continued Trade - STO 2 May08 45.00 Call @ 1.45 - Closed
22-Jan-08 - Dividend Received - DIV 200 Dividend @ 0.20 -
22-Apr-08 - Dividend Received - DIV 200 Dividend @ 0.20 -
28-Apr-08 - Buy Back & Roll Down - BTC 2 May08 45.00 Call @ -0.06 -
28-Apr-08 - Interim Trade - STO 2 May08 34.00 Call @ 0.53 -
28-Apr-08 - Buy Back & Roll Down - BTC 2 May08 45.00 Call @ -0.06 -
28-Apr-08 - Interim Trade - STO 2 May08 34.00 Call @ 0.53 -
Current Position Summary:
Stock Investment: $8,563.00
Income Generated: $1,298.90
Percent Income Generated: 15.17%
Annualized Income Generated: 14.23%
Net Profit If Called: -$464.10
Percent Return If Called: -5.42%
Annualized Return If Called: -5.09%
Days Held to Expiration: 389 days
Trade History:
23-Apr-07 - Initial Stock Position - BTO 100 WFMI @ 47.19 - VICC
23-Apr-07 - Initial Call Option - STO 1 May07 50.00 Call @ 0.83 - Expired
21-May-07 - Interim Trade - STO 1 Jul07 45.00 Call @ 0.24 - Closed
21-Jun-07 - Buy Back and Roll Out - BTC 1 Jul07 45.00 Call @ -0.03 -
21-Jun-07 - Dollar Cost Averaging - BTO 100 WFMI @ 38.44 -
21-Jun-07 - Combined Cost Basis - $8,563.00 200 @ 42.82 -
21-Jun-07 - Continued Trade - STO 2 Aug07 45.00 Call @ 0.29 - Expired
24-Jul-07 - Dividend Received - DIV 200 Dividend @ 0.18 -
20-Aug-07 - Continued Trade - STO 2 Sep07 50.00 Call @ 0.20 - Expired
24-Sep-07 - Continued Trade - STO 2 Oct07 50.00 Call @ 0.16 - Expired
22-Oct-07 - Continued Trade - STO 2 Dec07 50.00 Call @ 2.64 - Expired
14-Jan-08 - Continued Trade - STO 2 May08 45.00 Call @ 1.45 - Closed
22-Jan-08 - Dividend Received - DIV 200 Dividend @ 0.20 -
22-Apr-08 - Dividend Received - DIV 200 Dividend @ 0.20 -
28-Apr-08 - Buy Back & Roll Down - BTC 2 May08 45.00 Call @ -0.06 -
28-Apr-08 - Interim Trade - STO 2 May08 34.00 Call @ 0.53 -
SHFL - Closed
The SHFL position was closed today for a loss. The following is the trade history and returns, including IB commissions.
Covered Call Results
Stock Investment: $4,263.00
Income Generated: $605.10
Net Profit: -$2,688.90
Percent Return: -63.08%
Annualized Return: -53.29%
Duration of Trade: 432 days
Buy & Hold Comparison
Opening Price: $25.52
Closing Price: $4.84
P/L per Share: -$20.68
Shares: 200
Dividends: $0.00
Net Profit: -$2,068.00
Percent Return: -83.01%
Annualized Return: -68.47%
Duration of Trade: 432 days
Trade History:
21-Feb-07 - Initial Stock Position - BTO 100 SHFL @ 25.52 - Closed
21-Feb-07 - Initial Call Option - STO 1 Aug07 25.00 Call @ 2.99 - Closed
21-Jun-07 - Buy Back - BTC 1 Aug07 25.00 Call @ -0.11 -
21-Jun-07 - Dollar Cost Averaging - BTO 100 SHFL @ 17.11 - Closed
21-Jun-07 - Combined Cost Basis - $4,263.00 200 @ 21.32 -
21-Jun-07 - Interim Trade - STO 2 Jan08 20.00 Call @ 1.19 - Expired
24-Jan-08 - Interim Trade - STO 2 Mar08 10.00 Call @ 0.39 - Expired
28-Apr-08 - Close Stock Position - BTC 2 Closed @ 4.85 -
Covered Call Results
Stock Investment: $4,263.00
Income Generated: $605.10
Net Profit: -$2,688.90
Percent Return: -63.08%
Annualized Return: -53.29%
Duration of Trade: 432 days
Buy & Hold Comparison
Opening Price: $25.52
Closing Price: $4.84
P/L per Share: -$20.68
Shares: 200
Dividends: $0.00
Net Profit: -$2,068.00
Percent Return: -83.01%
Annualized Return: -68.47%
Duration of Trade: 432 days
Trade History:
21-Feb-07 - Initial Stock Position - BTO 100 SHFL @ 25.52 - Closed
21-Feb-07 - Initial Call Option - STO 1 Aug07 25.00 Call @ 2.99 - Closed
21-Jun-07 - Buy Back - BTC 1 Aug07 25.00 Call @ -0.11 -
21-Jun-07 - Dollar Cost Averaging - BTO 100 SHFL @ 17.11 - Closed
21-Jun-07 - Combined Cost Basis - $4,263.00 200 @ 21.32 -
21-Jun-07 - Interim Trade - STO 2 Jan08 20.00 Call @ 1.19 - Expired
24-Jan-08 - Interim Trade - STO 2 Mar08 10.00 Call @ 0.39 - Expired
28-Apr-08 - Close Stock Position - BTC 2 Closed @ 4.85 -
GGC - Closed
The GGC position was closed today for a loss. The following is the trade history and returns, including IB commissions.
Covered Call Results
Stock Investment: $4,269.00
Income Generated: $724.05
Net Profit: -$1,647.45
Percent Return: -38.59%
Annualized Return: -32.61%
Duration of Trade: 432 days
Buy & Hold Comparison
Opening Price: $20.54
Closing Price: $6.32
P/L per Share: -$14.22
Shares: 100
Dividends: $0.00
Net Profit: -$1,422.00
Percent Return: -69.23%
Annualized Return: -58.48%
Duration of Trade: 432 days
Trade History:
21-Feb-07 - Initial Stock Position - BTO 100 GGC @ 20.54 - Closed
21-Feb-07 - Initial Call Option - STO 1 May07 20.00 Call @ 2.13 - Expired
10-Apr-07 - Dividend Received - DIV 100 Dividend @ 0.08 -
21-May-07 - Continued Trade - STO 1 Jun07 20.00 Call @ 0.29 - Expired
19-Jun-07 - Continued Trade - STO 1 Nov07 20.00 Call @ 1.39 - Closed
10-Jul-07 - Dividend Received - DIV 100 Dividend @ 0.08 -
10-Oct-07 - Dividend Received - DIV 100 Dividend @ 0.08 -
02-Nov-07 - Buy Back & Roll Down - BTC 1 Nov07 20.00 Call @ -0.06 -
02-Nov-07 - Dollar Cost Averaging - BTO 200 GGC @ 11.08 - Closed
02-Nov-07 - Combined Cost Basis - $4,269.00 300 @ 14.23 -
02-Nov-07 - Interim Trade - STO 3 Dec07 12.50 Call @ 0.39 - Expired
10-Jan-08 - Dividend Received - DIV 300 Dividend @ 0.08 -
24-Jan-08 - Interim Trade - STO 3 Mar08 7.50 Call @ 0.29 - Expired
25-Mar-08 - Interim Trade - STO 3 May08 10.00 Call @ 0.29 - Closed
10-Apr-08 - Dividend Received - DIV 300 Dividend @ 0.08 -
28-Apr-08 - Close Option Position - BTC 3 May08 10.00 Call @ -0.06 -
28-Apr-08 - Close Stock Position - STC 3 Closed @ 6.33 -
Covered Call Results
Stock Investment: $4,269.00
Income Generated: $724.05
Net Profit: -$1,647.45
Percent Return: -38.59%
Annualized Return: -32.61%
Duration of Trade: 432 days
Buy & Hold Comparison
Opening Price: $20.54
Closing Price: $6.32
P/L per Share: -$14.22
Shares: 100
Dividends: $0.00
Net Profit: -$1,422.00
Percent Return: -69.23%
Annualized Return: -58.48%
Duration of Trade: 432 days
Trade History:
21-Feb-07 - Initial Stock Position - BTO 100 GGC @ 20.54 - Closed
21-Feb-07 - Initial Call Option - STO 1 May07 20.00 Call @ 2.13 - Expired
10-Apr-07 - Dividend Received - DIV 100 Dividend @ 0.08 -
21-May-07 - Continued Trade - STO 1 Jun07 20.00 Call @ 0.29 - Expired
19-Jun-07 - Continued Trade - STO 1 Nov07 20.00 Call @ 1.39 - Closed
10-Jul-07 - Dividend Received - DIV 100 Dividend @ 0.08 -
10-Oct-07 - Dividend Received - DIV 100 Dividend @ 0.08 -
02-Nov-07 - Buy Back & Roll Down - BTC 1 Nov07 20.00 Call @ -0.06 -
02-Nov-07 - Dollar Cost Averaging - BTO 200 GGC @ 11.08 - Closed
02-Nov-07 - Combined Cost Basis - $4,269.00 300 @ 14.23 -
02-Nov-07 - Interim Trade - STO 3 Dec07 12.50 Call @ 0.39 - Expired
10-Jan-08 - Dividend Received - DIV 300 Dividend @ 0.08 -
24-Jan-08 - Interim Trade - STO 3 Mar08 7.50 Call @ 0.29 - Expired
25-Mar-08 - Interim Trade - STO 3 May08 10.00 Call @ 0.29 - Closed
10-Apr-08 - Dividend Received - DIV 300 Dividend @ 0.08 -
28-Apr-08 - Close Option Position - BTC 3 May08 10.00 Call @ -0.06 -
28-Apr-08 - Close Stock Position - STC 3 Closed @ 6.33 -
CHS - Closed
The CHS position was closed today for a loss. The following is the trade history and returns, including IB commissions.
Covered Call Results
Stock Investment: $5,042.00
Income Generated: $622.50
Net Profit: -$2,465.30
Percent Return: -48.90%
Annualized Return: -56.84%
Duration of Trade: 314 days
Buy & Hold Comparison
Avg. Opening Price: $25.11
Closing Price: $6.51
P/L per Share: -$18.60
Shares: 100
Dividends: $0.00
Net Profit: -$1,860.00
Percent Return: -74.07%
Annualized Return: -86.11%
Duration of Trade: 314 days
Trade History:
19-Jun-07 - Initial Stock Position - BTO 100 CHS @ 25.11 - Closed
19-Jun-07 - Initial Call Option - STO 1 Nov07 25.00 Call @ 2.61 - Closed
24-Oct-07 - Buy Back - BTC 1 Nov07 25.00 Call @ -0.06 -
24-Oct-07 - Dollar Cost Averaging - BTO 200 CHS @ 12.66 - Closed
24-Oct-07 - Combined Cost Basis - $5,042.00 300 @ 16.81 -
24-Oct-07 - Interim Trade - STO 3 Dec07 15.00 Call @ 0.39 - Expired
24-Jan-08 - Interim Trade - STO 3 Mar08 10.00 Call @ 0.59 - Expired
25-Mar-08 - Interim Trade - STO 3 May08 10.00 Call @ 0.29 - Closed
28-Apr-08 - Close Option Position - BTC 3 May08 10.00 Call @ -0.06 -
28-Apr-08 - Close Stock Position - STC 3 Closed @ 6.52 -
Covered Call Results
Stock Investment: $5,042.00
Income Generated: $622.50
Net Profit: -$2,465.30
Percent Return: -48.90%
Annualized Return: -56.84%
Duration of Trade: 314 days
Buy & Hold Comparison
Avg. Opening Price: $25.11
Closing Price: $6.51
P/L per Share: -$18.60
Shares: 100
Dividends: $0.00
Net Profit: -$1,860.00
Percent Return: -74.07%
Annualized Return: -86.11%
Duration of Trade: 314 days
Trade History:
19-Jun-07 - Initial Stock Position - BTO 100 CHS @ 25.11 - Closed
19-Jun-07 - Initial Call Option - STO 1 Nov07 25.00 Call @ 2.61 - Closed
24-Oct-07 - Buy Back - BTC 1 Nov07 25.00 Call @ -0.06 -
24-Oct-07 - Dollar Cost Averaging - BTO 200 CHS @ 12.66 - Closed
24-Oct-07 - Combined Cost Basis - $5,042.00 300 @ 16.81 -
24-Oct-07 - Interim Trade - STO 3 Dec07 15.00 Call @ 0.39 - Expired
24-Jan-08 - Interim Trade - STO 3 Mar08 10.00 Call @ 0.59 - Expired
25-Mar-08 - Interim Trade - STO 3 May08 10.00 Call @ 0.29 - Closed
28-Apr-08 - Close Option Position - BTC 3 May08 10.00 Call @ -0.06 -
28-Apr-08 - Close Stock Position - STC 3 Closed @ 6.52 -
Sunday, April 27, 2008
Yield Analysis
Since the primary goal of my covered call portfolio is current income, I developed another spreadsheet to track the Annualized Yield on Cost of each position, consisting of option premiums plus dividends, if any. Some of my older positions don't pay dividends so the yield would come exclusively from option premiums.
My minimum yield goal is 12% annualized, based on the purchase price of the stock. For example, if I bought a stock for $50 and it paid $1.50/share in annual dividends, my Annualized Dividend Yield on Cost would be 3% ($1.50/$50). To meet my goal of 12% Annualized Yield on Cost I'd need a total of $6/share of annual income ($50*12%). So I would need an additional $4.50/share ($6.00-$1.50) in annual option premiums, or 9% Annualized Option Yield on Cost. This comes to about 0.38/share ($4.50/12) of option premium per month.
By analyzing the Annualized Yield on Cost of each position, I'll be able to tell which positions are meeting the minimum requirement of 12% and which positions are not. Used in conjunction with the spreadsheet I developed to identify a fundamental breakdown in the company, I'll be able to make more objective decisions on which positions to keep and which ones to close.
My minimum yield goal is 12% annualized, based on the purchase price of the stock. For example, if I bought a stock for $50 and it paid $1.50/share in annual dividends, my Annualized Dividend Yield on Cost would be 3% ($1.50/$50). To meet my goal of 12% Annualized Yield on Cost I'd need a total of $6/share of annual income ($50*12%). So I would need an additional $4.50/share ($6.00-$1.50) in annual option premiums, or 9% Annualized Option Yield on Cost. This comes to about 0.38/share ($4.50/12) of option premium per month.
By analyzing the Annualized Yield on Cost of each position, I'll be able to tell which positions are meeting the minimum requirement of 12% and which positions are not. Used in conjunction with the spreadsheet I developed to identify a fundamental breakdown in the company, I'll be able to make more objective decisions on which positions to keep and which ones to close.
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