MMM -- Roll Position Up and Out

The MMM position was rolled up and out:

Price	Date	Description	Total	aXIRR	aROI
$52.98	2009-04-15	Buyback 10 MMM Apr 2009 $50 @ $2.80	-$2,819.95	-5.9%	-10.4%
$53.92	2009-04-15	Sell 10 MMM May 2009 55.0 @ $2.00	$1,980.05	6.6%	11.5%

 

EEM -- Roll Position Up and Out

The EEM position was rolled up and out:

Price	Date	Description	Total	aXIRR	aROI
$27.82	2009-04-15	Buyback 20 EEM Apr 2009 $24 @ $3.85	-$7,729.95	36.7%	27.7%
$27.82	2009-04-15	Sell 20 EEM May 2009 $28 @ $1.48	$2,930.05	48.7%	36.6%

 

SPY -- Roll Position Up and Out

The SPY position was rolled up and out:

Price	Date	Description	Total	aXIRR	aROI
$83.98	2009-04-15	Buyback 10 SPY Apr 2009 $76 @ $7.95	-$7,969.95	-13.6%	-13.2%
$83.98	2009-04-15	Sell 10 SPY May 2009 $84 @ $3.70	$3,680.05	0.5%	0.5%

 

IWM -- Roll Position Up and Out

The IWM position was rolled up and out:

Price	Date	Description	Total	aXIRR	aROI
$45.35	2009-04-15	Buyback 20 IWM Apr 2009 $41 @ $4.05	-$8,129.95	10.6%	9.2%
$45.35	2009-04-15	Sell 20 IWM May 2009 $45 @ $2.98	$5,930.05	28.4%	23.4%

 

NFLX -- New Position

A new position was established in NFLX:

Price	Date	Description	Total	aXIRR	aROI
$47.51	2009-04-15	Buy 2000 NFLX @ $47.51	-$95,020.00	--	--
$46.55	2009-04-15	Sell 20 NFLX May 2009 $47.50 @ $3.30	$6,580.05	86.8%	59.7%
$46.55	2009-05-15	Sell at end of period	$93,100.00	86.8%	59.7%

 

USO -- Roll Down Position

The USO position was rolled down:

Price	Date	Description	Total	aXIRR	aROI
$29.49	2009-04-08	Buyback 10 USO Apr 2009 $32 @ $0.25	-$269.95	38.6%	31.4%
$29.49	2009-04-09	Sell 10 USO Apr 2009 $29 @ $2.10	$2,080.05	61.7%	47.4%

 

Criteria for Rolling an Option

In the ledger for each security, I now have a section that looks like this:

RIU	Payback	Prem	Strike	Bid	Ask	Ticker
-2.4%	-11.6%	$0.02	$19.00	$7.10	$7.15	MBYDS.X
-2.2%	-13.3%	$0.07	$20.00	$6.15	$6.20	MBYDT.X
-2.0%	-16.0%	$0.12	$21.00	$5.20	$5.30	MBYDU.X
-1.6%	-19.0%	$0.22	$22.00	$4.30	$4.35	MBYDV.X
-1.0%	-23.0%	$0.37	$23.00	$3.45	$3.50	MBYDW.X
--	--	$0.56	$24.00	$2.64	$2.68	MBYDX.X
1.1%	26.0%	$0.86	$25.00	$1.94	$1.96	EEMDY.X
2.8%	33.0%	$1.26	$26.00	$1.34	$1.35	EEMDX.X
1.1%	9.0%	$0.87	$27.00	$0.87	$0.88	EEMDE.X
-0.4%	-2.5%	$0.50	$28.00	$0.50	$0.52	EEMDH.X

It gives me an overview of all of the near-term options and the potential reward for rolling the option. The gray-shaded cells indicate the current option I hold. The green-shaded cells tell me the rolling choice that would be the maximum RIU, maximum Payback, and maximum premium.

"RIU" is the Return I would get if I roll to that option price and the price remains unchanged through the option expiration date.

"Payback" is the amount I recover when I roll the option. That is, if I roll up the option by $2 in strike price for a net cost of $1, then my "Payback" would be $1. Again, this assumes the stock price will remain unchanged through the option expiration date. Also, if the strike price is higher than the current stock price, the "Payback" is to the current stock price, not the strike price of the option.

Currently, I am thinking my thresholds will be a minimum of 2% RIU and 40% Payback in order to roll an option. I may decide to adjust that for the number of days remaining, but I haven't decided just yet. It would make it easier to compare rolling with multiple-month options when an option month-end is approaching.