Okay, I have been out of the loop now for a couple of months. I have had to travel to places that don't have high speed internet but I have all that fixed now with my new DROID! I will pick back up my blog postings in the new year however they may not all be real time as before. I will try to post them all as close to real time as possible but if I am on the road trading from my Smart Phone then I will have to wait until that evening for posting. Anyhow, here was a trade for today:
Investment Return / Protection For Naked Puts
Ticker: PFE
Expiratoin: 2/19/10
Invest Date 12/30/09
Current Stock Price $18.43
Strike Price $18.00
Premium $0.63
Annual Dividend $0.72
Days to Expiration 51
Return (Assumes CSP) 3.50%
Annualized Return 25.05%
Downside Protection 5.75%
Effective Dividend if Put 4.15%
Monthly Options Expiration Results through May 17th, 2024
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Each month after the monthly options expiration date, this summary report
provides the results on all positions that have been closed out during the
past m...
10 hours ago
Hi Chris,
ReplyDeleteWelcome back to the justcoveredcalls group.
1. I calculate that your downside breakeven price point (exluding commissions) as $17.37 ($18.00-$.63). Below $18.00 at expiration you would have to purchase the stock at $18.00 -- so wouldn't your DSP be 3.5% ($.63/$18.00)?
2. I know you realize this, but you will miss the Feb 3rd 2010 ex-div date since you sold a put instead of a covered call position. Also, the price of PFE will decline by the dividend amount of $.18 upon market open that day.
3. It takes a considerable effort, but I hope you will consider documenting the performance results of each of your trades next year (2010) as each position is closed out. Mike A. and I both do that on our blogs and I've found it helpful in analyzing what I do right and wrong and also for fine-tuning my methods.