The Money Tree

Safely Generating Income in Retirement

Position Update – JEC

Posted by mounddweller on June 5, 2009

I closed out my position in JEC this morning by BTC JUN $35 puts for $0.05.  Why did I do this?  Simply because the risk in the stock falling was higher than the additional return to be gained ($0.05/share) with another two weeks remaining to expiration.  Doing so also releases another $7000 (these were cash secured puts) for any other trading opportunities that present themselves over the next two weeks.

So how did I do on this trade.  Well, let’s look at the numbers.  I sold 2 puts back on 5/11 at $1.25, netting $239.53 after commissions.  I bought them back on 6/5 at $0.05, paying $20.45 total with commissions.  Thus, I ended up making $219.08.  Since this was a CSP transaction my ROIC was ($219.08/$7000.00) or 3.13% in 25 days, yielding an annualized ROIC of 45.69%.  The table below presents these numbers in a more organized fashion.

 JEC transactions

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