Friday, December 30, 2011

Profitable Trade: AT&T (T) Puts

Today in a taxable account I closed the following transaction:

11/21/2011   STO 2 Jan 21 2012 T 27.5 Puts @.9                            168.47
12/30/2011   BTC 2 Jan 21 2012 T 27.5 Puts @.05                           -10.03

In this trade we made $158.44 in 39 days. I closed it because we were down to our last nickel of profits and reached the point where we weren't charged commissions for closing. These puts were covered so our covered return was 2.98% or 27.89% annual. The margin maintenance requirement was $1059.61. If one were to calculate return on margin (ROM) the return jumps to 14.95% or 139.9% annual.

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