Several months ago, I purchased 100 shares of Manulife Financial Corporation on the Toronto Stock Exchange. The ticker symbol is MFC. I purchased my shares at $18.61 per share. Since I have owned the shares, the price of the stock has fallen to below $17.00 to above $19.00. I attempted to sell cover calls, but the premium was not high enough to justify writing a call. With my brokerage, there is an option assignment fee of $24.95. Some brokers have no option assignment fee, while other brokerages have higher option assignment fees.
Manulife Financial Corporation, together with its subsidiaries, provides financial advice, insurance, and wealth and asset management solutions for individuals, groups, and institutions in Asia, Canada, and the United States. It offers various health and individual life, and individual and group long-term care insurance through insurance agents, brokers, banks, financial planners, and direct marketing. The company also provides pension contracts and mutual fund products and services; various retirement products to group benefit plans; and annuities, single premium, and banking products, such as deposit and credit products to Canadian customers, as well as non-guaranteed, partially guaranteed, and fully guaranteed investment options through general and separate account products. It distributes wealth and asset management products through insurance agents and brokers affiliated with the company, securities brokerage firms, financial planners, pension plan sponsors, pension plan consultants, and banks. In addition, the company is involved in the property and casualty reinsurance business; and run-off reinsurance operations, including variable annuities, and accident and health. Further, it provides planning software platform that enables financial advisors and institutions to help clients make financial planning decisions; manages timberland and agricultural portfolios; insurance agency, investment counseling, portfolio and mutual fund management, mutual fund dealer, financial reinsurance, and mutual funds marketing businesses, as well as investment management, advisory, and dealer activities. Additionally, the company holds and manages oil and gas properties; holds oil and gas royalties and European equities; and develops and operates hydro-electric power projects. Manulife Financial Corporation was founded in 1887 and is headquartered in Toronto, Canada. (Source: Yahoo Finance)
On October 13th, I put in a trailing stop limit order of $0.05 stop and and offset of $0.01. The stock was trading at $19.01 at this time. This means my starting point is $18.96. So selling point reached $19.13 yesterday before it filled. That means the price of the shares went up to at least $19.18. Due, to being in an low interest rate environment, this stock will struggle in price appreciation as the fixed income portion of their instruments are affected.
Currently, MFC is paying an annual dividend of $0.74 per share. That means my annual dividend income has been reduced by $74.00.
Summary:
Initial Price = $18.61
# of shares = 100
# of dividend payments = 1
amount of dividend payment = $18.50
Sell Price = $19.13
Profit = # of shares *(Proceeds of Sale - Initial Cost) + Dividends
= (1907.70 - 1865.95) + $18.50
= $60.25
Return = Profit / Initial Cost
= $60.25 / $1865.95
= 3.23%
My return is 3.23% in just over 4 months. If the stock falls below my previous entry price, I would strongly consider purchase shares again. I will update my investing tab spreadsheet in early October to reflect this sale.
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