| Stock Price | Date | Description | OptPrice | Total | xIRR |
|---|---|---|---|---|---|
| $85.85 | 2012-01-19 | Sell 20 MMM 1/27 2012 $85.00 Call @ $1.99 | $1.99 | $3,950.05 | 16.7% |
When the call sold, it was the high for the day so far. Extrinsic value on this call was $1.14 for the week, or $0.14 per day. Much better than in the past. Maybe people are getting too optimistic about the near future? I also looked at the $87.50 for next week, which was paying $0.09 per day, and the Feb $85 call, which was paying $0.05 per day.
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Nice that you were able to capture the up move in the stock this morning.
ReplyDelete2 quick questions:
Does your xIRR of 16.7% apply to the entire timeframe from when you original purchased MMM in mid-2010?
Sometimes you do weeklies and sometimes monthlies. Do you have decision-making rules that define you choice? Or is that a work in progress?
Glad to see you blogging on your site again!
Best wishes,
Jeff
Maybe I should have slept a little later this morning -- up to $86.22 now.
ReplyDeleteYou are correct about the XIRR return number -- first transaction is 2010-07-19. B&H over that period, including dividends, is about 10%.
Last time I wrote the monthly on MMM, it was because the monthly was actually paying more time decay per day than the weekly. However, I did the same thing recently on IWM, and it turned out the prices on the weeklies were only temporarily low -- time decay per day was almost double on them just a short time later. So, maybe, a work in progress. :)
Oops -- the 10% B&H number isn't comparable to the XIRR calculation on the covered calls, because the XIRR calculation gives an annual return. Looking at the cash flow on B&H and dividends of MMM, the comparable XIRR would be 6.6%.
ReplyDelete