I should have known when I recommended to a friend Saturday at the SF Options Group that I had just bought UVV - Universal Leaf tobacco- which had been one of my 10 big losers over four years, that it would bomb again. Luckily, it's in the DITM account. It fell nearly four points today on a downgrade (Schwab has it as a rare "A" stock), so it fell just below my Sold Call of $55. Might now be a better buying opp.
J P Morgan got called away at expiry (ran up too far to roll out) - a mere 8 1/2% annualized return from Oct.1 (nearly 6 months), lowering my average. But still better than MMFs. Bought 200 at $8269, sold Calls for $908, dividends of 120 (2); called away at $38, to net $350.
Also called away was Hasbro, which I held for 11 months - rolling UP a strike. Its annualized was a little better than JPM - 8.74%. With the VIX at a 2007 low (!!!) of 11+, not much IV in the stocks. Still, the dividends plus a safety net (see UVV above), makes it worthwhile for most of my assets.
Monday, March 18, 2013
Friday, March 8, 2013
THE NEW NORMAL?
In the previous post the unusual event of a partial call-away of TAL was noted - a few days later it happened again with WMB. Apparently that was all the investor/marketmaker needed. Hopefully this is not a trend, as it will increase commission costs slightly.
Today, with STX (Seagate) hopefully going ex-dividend very soon (still not declared from Dec.12, 2013), it has been raised twice the past year, is rated B by Schwab, but still should be hedged. Therefore, the March 27 strike call (5 points ITM) was rolled UP to the 28 in Sept. The call alone should garner an 8.8% annualized return (over the six months), plus the dividend (2), would be nearly 15% - more if called away in June.
Nota bene: Despite excellent returns so far this year in DITM, the question has to be posed: is trading really worth it? With the new GI Bills (Gov't Intervention), the logic of a trade is such -
Do a Buy/Write giving up the bid/ask spread; pay commission(s); if profitable, pay state and federal taxes on it, pay ( in my current case) a tax preparer big bucks to analyze the trades (brokers do not have to report cost bases in options until 2014, so Gain/Loss has to match 1099B). Not to mention any losses or break-evens. Once again our wise solons are contemplating a transaction tax again.
Today, with STX (Seagate) hopefully going ex-dividend very soon (still not declared from Dec.12, 2013), it has been raised twice the past year, is rated B by Schwab, but still should be hedged. Therefore, the March 27 strike call (5 points ITM) was rolled UP to the 28 in Sept. The call alone should garner an 8.8% annualized return (over the six months), plus the dividend (2), would be nearly 15% - more if called away in June.
Nota bene: Despite excellent returns so far this year in DITM, the question has to be posed: is trading really worth it? With the new GI Bills (Gov't Intervention), the logic of a trade is such -
Do a Buy/Write giving up the bid/ask spread; pay commission(s); if profitable, pay state and federal taxes on it, pay ( in my current case) a tax preparer big bucks to analyze the trades (brokers do not have to report cost bases in options until 2014, so Gain/Loss has to match 1099B). Not to mention any losses or break-evens. Once again our wise solons are contemplating a transaction tax again.
Tuesday, March 5, 2013
EX-DIVIDEND
In an unusual circumstance, the most recent call-away came on two separate days - the 1st and 4th of March. It was 100 shares each of TAL (Tal Int'l). However, since the return was an annualized 24.52% I shouldn't complain of paying two commissions. Purchase price in mid-Oct. was $6909; net return after rolling UP a set of calls was $706, net of all commissions. If extended over twelve months, not five, the return would be nearly 25% with the same money.
Kinda makes up for any past or future losses that may happen.
Kinda makes up for any past or future losses that may happen.
Subscribe to:
Posts (Atom)