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  • yourbestfriendintheworld yourbestfriendintheworld Dec 16, 2011 4:10 PM Flag

    Dollarmite 3: This time it's personal

    Closed the short Puts.

    Buy Close AGNC Jun 16 '12 $26 Put Executed 1.65
    Buy Close AGNC Mar 17 '12 $29 Put Executed 1.85

    The Junes I sold for 2.60, and the Marches for 2.65. But I did twice as many of the Junes. So the average realized gain is (2*(2.60-1.65)+(2.65-1.85))/3 or 0.90 per contract.

    The average risk is (2*(26-2.60)+(29-2.65))/3 = 24.383 per contract.

    The overal ROR is then 0.90/24.383 = 3.7%

    Given the egging we've been taking this quarter, I'm satisfied with that.

    The two sets of calls (June $26 and March $28) are still open. I think maybe I can pay for the commissions if I wait until Monday, or I can just ride those into next quarter. Especially the March tranche, which as we speak is a pitiable shade of crimson owing to the self-abnegating reticence of someone else to let me call their shares away.

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    • yourbestfriendintheworld yourbestfriendintheworld Dec 19, 2011 7:11 PM Flag

      Decided on a bird in the hand strategy rather than a wait and see strategy.

      Sell Close AGNC Jun 16 '12 $26 Call Executed 2.90

      The basis on those was 2.30, so the ROI is 26%.

      That was the remaining green leg. Still have one red Call position in March 28's. Bought them for 1.29 back when the rivers ran with gold, apparently, because the past month they couldn't break 1.10 and tomorrow they'll probably enter mid-2-digit territory until the daffodils and ex-divs return.

      Combining the June positions, the risk was 26-2.60+2.30 = 25.70 and the return was .95+.60 = 1.55, for an ROR of 6.0% and an IRR of 6%/(46/365) = 47.8%

      Really wish I knew what the deal was on the March calls. It's like shooting yourself in the eye with a BB gun.

      • 1 Reply to yourbestfriendintheworld
      • Good work YBF. By reporting each leg separately, you do injustice to the beauty of your synthetic longs -- whereby, one could say, you are being paid to make money. Doesn't get better than that.

        With three green legs, you could have afforded to close the crimson 4th one and get it out of your mind for the holidays. It doesn't have to be personal with each leg separately. After all, you opened these as combinations, no?

        BTW daffodils bloom in April, I believe. Just after the March opex. But maybe the buds will deliver.

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