Monday, January 23, 2012

Profitable Trade: Microsoft (MSFT) Covered Calls

In a traditional IRA we got assigned our MSFT calls. The entire transaction was as follows:


11/01/2011  13:29:58 Bought 200 MSFT @ 26.029                                      -5,215.79
11/01/2011  13:31:11 Sold 2 MSFT Nov 4 2011 26.0 Call @ 0.36                        60.47
11/04/2011  14:52:03 Bought 2 MSFT Nov 04 2011 26.0 Call @ 0.25                 -61.52
11/04/2011  14:52:44 Sold 2 MSFT Dec 17 2011 26.0 Call @ 0.88                     164.45
12/08/2011  Dividend                                                                                     40.00
12/16/2011  BTC 2 MSFT Dec 17 2011 26 Calls @ .05                                       -10.03
12/16/2011  STO 2 MSFT Jan 21 2011 26 Calls @.67                                        112.47
01/21/2012  Sold 200 MSFT @ 26                                                                  5179.91

We made $280.38 in 82 days on an average of ~$5000 invested. This equates to a return of 5.6% or 24.92% annual. We were fairly deep in the money so no rolls made any sense. After doing this for many years I have a rule that I only roll for a credit. I really like Microsoft and will probably write covered puts in this account for income and to possibly buy the stock at a price I want to pay.

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