Tuesday, November 15, 2011

Profitable Trade: Lowe's (LOW) Covered Call

Today I closed out the following transaction in a Roth IRA:


08/02/2011  11:10:55 Bought 200 LOW @ 20.8495                                     -4,179.89

08/02/2011  11:11:26 Sold 2 LOW Oct 22 2011 21.0 Call @ 1.06                      200.50

10/18/2011  13:32:43 Bought 2 LOW Oct 22 2011 21.0 Call @ 0.48                -107.52

10/18/2011  13:34:02 Sold 2 LOW Nov 19 2011 21.0 Call @ 1.03                     194.47 

11/02/2011  03:09:46 QUALIFIED DIVIDEND (LOW)                                         28.00

11/15/2011  13:10:14 Bought 2 LOW Nov 19 2011 21.0 Call @ 2.15               -441.52

11/15/2011  13:11:31 Sold 200 LOW @ 23.1218                                           4,614.28

We made $308.32 on this investment in Lowe's a Dividend Champion. This is a profit of 7.74% on our initial investment which equates to 26.57% annual. I closed the position rather than letting it get assigned because it cost about the same in commissions and I've got access to the proceeds 4 days sooner. This is a meat and potatoes enhanced income transaction.

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