| aXIRR | Projected annual if: |
|---|---|
So, at least for the past month, it appears the active rolling of options was a positive thing to do.
Sunday, January 18, 2009
January Summary/Checkpoint
Just a checkpoint to see how things are going:
So, at least for the past month, it appears the active rolling of options was a positive thing to do.
So, at least for the past month, it appears the active rolling of options was a positive thing to do.
Friday, January 16, 2009
WFC -- New Position
A new position was established in WFC:
Wednesday, January 14, 2009
PFE, SPY -- Rolled out
The PFE and SPY positions were rolled out to the next expiration month:
Tuesday, January 13, 2009
USO -- Rolled Down
The USO position was rolled down:
EEM, EFA -- Rolled Out
The EEM and EFA positions were rolled out to the next expiration month:
Monday, January 12, 2009
SPY -- Roll Position Down
The SPY position was rolled down:
IWM -- Roll Position Down and Out
The IWM position was rolled down and out:
DIA -- Rolled Down and Out
The DIA position was rolled down and out:
What the aXIRR and aROI percentages mean on each line (each assumes stock price will remain unchanged to the end of the option expiration period):
What the aXIRR and aROI percentages mean on each line (each assumes stock price will remain unchanged to the end of the option expiration period):
- On the sale of a call, they state the returns at the point the call was sold.
- On the repurchase of the call, they state the returns just prior to the repurchase of the call.
- On the "Sell at end of Period", they state the returns based on the current stock price.
Thursday, January 8, 2009
EEM -- Rolled Down
The EEM position was rolled down:
DIA -- Rolled Down
The DIA position was rolled down:
Tuesday, January 6, 2009
Transaction and Analysis Ledger
Here is a picture of what my current ledger looks like for an individual equity.
The top section is a list of actual transactions, plus a theoretical closing transaction that is calculated as the minimum of the current price and the strike price of the current outstanding call.
The second section is a little analysis section to tell me how aXIRR an aROI will change if I roll the existing call. I just need to enter the new option ticker symbol and it does the calculations.
The top section is a list of actual transactions, plus a theoretical closing transaction that is calculated as the minimum of the current price and the strike price of the current outstanding call.
The second section is a little analysis section to tell me how aXIRR an aROI will change if I roll the existing call. I just need to enter the new option ticker symbol and it does the calculations.
EEM -- New Position
A new position was established in EEM:
DIA -- New Position
A new position was established in DIA:
MMM -- Roll Up and Out
The MMM position was rolled up and out:
Saturday, January 3, 2009
Summary Workbook and terminology
Originally, I had created a ledger for all positions, but I was finding that hard to get a good overview of everything. Instead, I split each position up into its own worksheet and created a summary worksheet that looks like this:
For easy navigation, each ticker symbol is a link directly to the worksheet for that equity and each equity worksheet has a direct link back to the summary sheet.
The aXIRR and aROI numbers give me an overview of the total returns on each position. OptionRV tells me the relative value of the option, current price to transaction price. StockRV tells me the relative value of the stock, current price to outstanding option strike price.
So, based on the above, I'd probably take a look at rolling EFA, MMM, and PFE.
aXIRR is the annual internal rate of return, as computed by the XIRR() function in EXCEL.
aROI is the annual rate of return on an income stream basis. Basically:
aROI = (stock gain + net option premiums + dividends) / (initial cost) * (365 / # of days of position)
For easy navigation, each ticker symbol is a link directly to the worksheet for that equity and each equity worksheet has a direct link back to the summary sheet.
The aXIRR and aROI numbers give me an overview of the total returns on each position. OptionRV tells me the relative value of the option, current price to transaction price. StockRV tells me the relative value of the stock, current price to outstanding option strike price.
So, based on the above, I'd probably take a look at rolling EFA, MMM, and PFE.
aXIRR is the annual internal rate of return, as computed by the XIRR() function in EXCEL.
aROI is the annual rate of return on an income stream basis. Basically:
aROI = (stock gain + net option premiums + dividends) / (initial cost) * (365 / # of days of position)
Friday, January 2, 2009
USO -- Roll Position Up
The USO position was rolled up:
The price has climbed to $34.06, so I decided to roll up again. Am I rolling too often? It doesn't seem to be hurting the aXIRR or aROI, but I haven't seen a decline yet either. But it seemed like a good move to up the strike price by $5 for a net cost under $2.
I did run into a problem on this transaction. I bought back the Feb 2009 $30 fine, but when I went to sell the Feb 2009 $35, the Wells Fargo interface wouldn't accept my order. I had to call a service rep to have them put in the order. By the time they got the order in, my original limit price of $3.90 ended up executing for a market price of $4.53 -- so the problem earned me some money. :)
The price has climbed to $34.06, so I decided to roll up again. Am I rolling too often? It doesn't seem to be hurting the aXIRR or aROI, but I haven't seen a decline yet either. But it seemed like a good move to up the strike price by $5 for a net cost under $2.
I did run into a problem on this transaction. I bought back the Feb 2009 $30 fine, but when I went to sell the Feb 2009 $35, the Wells Fargo interface wouldn't accept my order. I had to call a service rep to have them put in the order. By the time they got the order in, my original limit price of $3.90 ended up executing for a market price of $4.53 -- so the problem earned me some money. :)
IWM -- Roll Position Up
The IWM position was rolled up:
I wasn't totally happy with this, since it cost me $2.09 to roll up the price $3.
I wasn't totally happy with this, since it cost me $2.09 to roll up the price $3.
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