Update on a few trades

In the past month, I sold a put option on Roger's Communication Class B shares listing on the Toronto Stock Exchange. In this post, I gave 3 scenarios about what happens if the market goes up, sideways or down.

The put had a strike price of $44.00, and I was paid a premium of $69.00 excluding commissions for making the promise to buy 100 shares  at the strike price before or on expiration day.  On Friday, June 23, the closing price of RCI.B shares were $42.84. The put option was assigned and the shares showed up in my brokerage account.

Recap:   Strike Price:   $44.00
              Premium paid:  $69.00-$10.95 commission = $58.05
              Option Assignment Fee : $24.95
        
              ACB = 100 shares * 1contract * $44.00-$58.05+$24.95
                       = $4366.90


               Average Price per share = ACB/ # of shares
                                                      = $4366.90/100 shares
                                                      = $43.6690 per share

Currently RCI.B is paying a quarterly divided of $0.46 or $1.83 annually.

                     Yield on cost = 1.83/43.6690
                                           = 4.191 %

My average price per share is lowered than if I had just bought the stock. Therefore my money is working harder for me.

In previous post on this trade, I wondered how the shares would show up in my brokerage account if assigned. It shows up as $44.00 as the average price, which is the strike price. So for tax purposes, I have to use the amount of $4366.90 as my ACB.

I plan to write cover calls on this position in Roger's.

I also made a trade in where I bought 6 contracts of a RY.TO $74.00 21 June 2014 put option. This trade did not go in my favor and expired worthless.

               Cost = premium - commission
                        = $270+$15.95
                        = $285.95

                Profit = 0-$285.95
                           = -285.95 = -100%


Disclosure : Long RCI.B

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk