Today our Microsoft puts expired worthless. Our transaction was as follows:
STO 4 MSFT Dec 17 2011 24 Puts@.38 +138.95
Our return is 1.45% for 25 days which
equates to 21.17% annual. If one were to calculate return on margin
(ROM) our return on a margin requirement of $1744.91 is 8% which equates
to 115% annual.
Showing posts with label MSFT put. Show all posts
Showing posts with label MSFT put. Show all posts
Saturday, December 17, 2011
Tuesday, November 22, 2011
Sold Microsoft (MSFT) Puts
Today in a taxable account and during amateur hour (ha!) I entered into the following transaction:
STO 4 MSFT Dec 17 2011 24 Puts@.38 +138.95
Microsoft is a cash cow and is now steadily raising it's dividend. It is also extremely heavily traded and, therefore, very liquid. It is a holding we are happy to own long term. If put to us we will have a cost basis after commissions of ~23.70/share. There has been strong support for MSFT at this level. At $23.70 our yield on cost is ~3.4%.
If the puts expire worthless our return is 1.45% for 25 days which equates to 21.17% annual. If one were to calculate return on margin (ROM) our return on a margin requirement of $1744.91 is 8% which equates to 115% annual.
I've entered into several transactions during this time of fear and uncertainty. I'll probably chill for a little while and see how things play out. My feeling is that we are oversold, however, as seems to be the norm these days a crash is always a possibility.
STO 4 MSFT Dec 17 2011 24 Puts@.38 +138.95
Microsoft is a cash cow and is now steadily raising it's dividend. It is also extremely heavily traded and, therefore, very liquid. It is a holding we are happy to own long term. If put to us we will have a cost basis after commissions of ~23.70/share. There has been strong support for MSFT at this level. At $23.70 our yield on cost is ~3.4%.
If the puts expire worthless our return is 1.45% for 25 days which equates to 21.17% annual. If one were to calculate return on margin (ROM) our return on a margin requirement of $1744.91 is 8% which equates to 115% annual.
I've entered into several transactions during this time of fear and uncertainty. I'll probably chill for a little while and see how things play out. My feeling is that we are oversold, however, as seems to be the norm these days a crash is always a possibility.
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