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I purchased TD stock when I sold a naked put option which was assigned due to the price of the stock fell below the strike price at the expiration date. You can read this transaction here.
Naked put assignment : $5553.90 cost basis
Dividends received : $47.00
Option premium received for call option: $99.05
If call option is assigned:
Proceeds = 100 shares *strike price = 100 * $56.00 = $5600
Profit = ((Proceeds + call option premium received - option assignment fee) - Naked put assignment) + dividends received
= $5600 +$99.05 - $24.95 - $5553.90 +$47.00
ROI = Profit / Initial investment =
= 167.20 /5553.90
= 3.01 %
If the option is not called away, I will still own the stock and still keep the premium which I was paid right away. Please note that my strike price is $56.00 for both the put option I sold in 2014 and for this covered call transaction.
Disclosure: Long TD