The Money Tree

Safely Generating Income in Retirement

Archive for July 5th, 2011

CSCO – An Update

Posted by mounddweller on July 5, 2011

Fellow Traders,

A short post today to update you on my position in CSCO.  First a brief recap.  I started my trade in CSCO several months ago selling puts at the $18.  Last month I had the stock put to me at $18 because I was asleep at the switch and didn’t get my position rolled out fast enough. 

In addition to the original puts at the $18 strike, back on May 13th I sold more CSCO puts at the $16 strike with a JUL expiration.  Having learned my lesson from the $18 puts I decided to roll my JUL puts early.  Consequently, today I BTC my JUL $16 puts and rolled them out to the SEP expiration for a net credit of $0.46. 

Below is a synopsis of my returns for the $16 put portion of my position.  As you can see, assuming I hold the SEP puts to expiration my net return on committed capital is 4.62% (13.4% annualized).  This exceeds my minimum target return of 12%/year.

Date  Transaction  Gross Amount   Commissions   Net Amount 
05/13/11 STO 5 CSCO JUL $16 Puts at $0.33  $        165.00  $       (10.99)  $      154.01
07/05/11 BTC 5 CSCO JUL $16 Puts at $0.44  $       (220.00)  $       (11.01)  $     (231.01)
07/05/11 STO 5 CSCO SEP $16 Puts at $0.90  $        450.00  $         (3.07)  $      446.93
     $        395.00  $       (25.07)  $      369.93
         
  Total Committed Capital  $     8,000.00    
  Net Return on Committed Capital  $        369.93    
  Net % Return 4.62%    
  Annualized % Return 13.40%    

Regards,

Troy   

 

Advertisements

Posted in Portfolio Updates | Tagged: , | 6 Comments »