Friday, September 6, 2013

DITM update

Yet another first for DITM: on Feb.21 of this year I bought 300 shares of BBY @$17 for $5133; they have now been called away in separate tranches of 100, making accounting complicated - so I averaged the time period at 6 months, surrounding Aug. Here is the result:
Bought: $5133, sold 3 June16 Calls for $685
100 called for $1591; rolled UP to Sep.22 for a debit of  $1122 - one must be very careful about rolling up for debits, since they can come back down for a loss. Another hidden benefit of a Bull market is additional profits by rolling up the strikes, and BBY really ran up.
Aug.30 and Sep.5 (just before ex-D) 2 100 lots were called, each $2191 (times 2) - provoking 3 commissions, not one. Dividends received were $85. Net profit for 6 months (sic): $488, for a % of  9.5%, annualized at 19%. (The $1122 is built into the debit). Not bad.

Still, it falls short of the new strategy that I'm using for another portion of assets - the LEAPS strategy that I wrote about this week in:

LEAPS offer 20 to 60% with less monitoring, fewer commissions - still using the safety of covered calls.

No comments:

Post a Comment