Portfolio Update - December 2016

       The month of December  2016 is now behind us. The price of barrel of crude oil currently trades at approximately $53.00 per barrel for WTI barrel of crude oil.

       I currently own shares in the Bank of Montreal (BMO) which trades on the Toronto Stock Exchange announced a dividend increase prior to market opening on Dec 6.  I own 35 shares of BMO and the dividend increase is more than welcome.  I get rewarded with increasing dividends for just being a shareholder.  This is the beauty of dividend growth investing.  The company does all the work and I receive a dividend payment every 3 months for just being a shareholder.  When the company is doing well, they will increase the dividend as this is what investors are looking for as a dividend growth investor.

   I wrote about selling covered calls in IAMGOLD (IMG.TO) on December 10.  I currently own 900 shares of this stock and the stock does not pay a dividend.  I sold 9 covered call contracts and collected a premium of $242.05 after commissions.  The contracts had 8 days to expiration after the calls were sold. This option expired worthless, so I ended up keeping the premium of $242.05 for being the option seller.

   Option expiration day is, for the most part, occurs on the 3rd Friday of each month.  I had 3 options expired without being assigned.  I got to keep the premium for all 3 option trades as I was the option seller in each case.

    I sold 2 call contracts of Potash Corporation of Saskatchewan (POT).  I actually ended up selling 4 contracts of POT as my brokerage put the order in twice. I bought to cover 2 call contracts as a result of my brokerage put in my order twice.  To read about this trade, you can click here. The 2 covered call contracts that I continued to own expired on Dec 30.

   I completed my trading for the year which involved 30 trades in total, which you can read about here.  You can also see all my trades by clicking on the trading tab above.

   To close out the month of December, I decided to sell covered calls in IMG.TO again.  The strike price is $5.00 and the expiration day is January 20.  I collected a net premium of $413.05 selling these covered calls, which you can read about here.


Shares Acquired Through DRIP

1 Unit of CUF.UN.TO @ $14.59 for a total cost of $14.59           (TFSA)
1 Unit of CUF.UN.TO @ $14.37 for a total cost of $14.37      (TFSA)

4 Unit of D.UN.TO @ $18.8335 for a total cost of $75.33  (Margin Account)

0.150 shares of ENB @ $55.93 for a total cost of $8.39  (Transfer agent )

Cominar REIT (CUF,UN.TO) paid a distribution on the December 15 and a second distribution on December 30.  This is the reason for 2 separate DRIP purchases within the same month.  CUF.UN.TO will not pay a distribution in mid January.

As of Dec  31,  2016, the value of the portfolio is $101,049.54.  This is a 5.08%  increase over last month's total.  The spreadsheet in the investment tab above has been updated.

Edit:  Transforce Inc has changed their name to Transforce International Inc after shareholder approval.  On December 30, their stock symbol on the Toronto Stock Exchange was changed from TFI to TFII, which is reflected on the spreadsheet. 

Edit:  The portfolio value has been corrected $101049.54.  Inside my margin account, I have my trading account and a portion tied to savings. I forgot to subtract these balances.

 Disclosure:   Long IMG.TO, POT

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.

Option Trade - Covered Call

     Recently, I wrote about selling cover calls for 9 contracts on IAMGOLD (IMG.TO) with an 8 day expiration cycle.  These 9 contracts expired worthless on December 16, which you can read about here.

     So, I was looking for an opportunity to sell more covered calls as this stock does not pay a dividend. Today, I noticed the price of gold was way up which provided an opportunity.  I sold 9 contracts at $0.48 per contract and expiration day of January 20 2017. I collected a premium of $413.05 after commissions.

Summary 

Days to expiration:   22 days
Strike Price:   $5
Premium Collected :  $413.05
Initial Cost : $4691.80
Option Assignment Fee : $24.95

Scenario #1:  Option is not assigned

Return = Premium Collected /  Sell Price
           = $413.05 / $4500
            = 9.18%

This return of 9.18% represents a return for only 22 days. Currently the interest on my high interest savings account is 0.80% per year.

Annualized Return= $413.05/$4500 * ( 365 / 22)
                           = 152.2%

Scenario #2 :  Option is Assigned


Scenario #2:  Option is assigned

Return=   Profit/ Initial cost
           = { (9*100*$5.00 + $413.05 - $24.95) - $4691.80} / $4691.80
           = 1.108%

If the option is assigned, the return is still positive.

Long IMG.TO

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.

Final Trading Account Update - 2016

As previously stated on this blog, that I have started a trading account with a balance below $1000.00.   I started to add $50.00 every two weeks but that has stopped due to a recent job loss.  The following table shows my stats from the start of 2016:

                               # of trades :                30
                               Total Capital added:    $250.00
                               Trading Acct Balance:  $3593.49
                               Average Draw down:   $42.02
                               Average Loss:             $51.83
                               Average Accuracy:    90.00%
                               Average Risk:              $53.50
                               Average Reward:         $105.83
                               Average R/R :             1: 1.978

     
       I have been trading penny stocks, stocks, REITS and options.  Any dividends that will be received from this account will stay within the account. The accuracy rate is high. Does this mean that I am a super trader? This does not mean that I am a super trader.  The risk to reward ratio states of every $1.00 of risk there is reward of  $1.978.  Ideally, a trader should aim for a 1:2  risk to reward ratio which causes the accuracy rate to be lower.

     I have completed 30 trades.  After completed of 30th trade on December 29, I decided to withdraw 3% of my balance $3704.63 and transfer it to my TFSA account for future investment purposes. This withdraw reduced my account balance what is not above in the table.  As from the chart above, my percentile gains in the trading account are approximately 325%. 

Note:  The trades are listed under the Trading Tab above with all the trades listed as of December 29, 2016

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.

Option Trade

     I recently wrote about recent option trades expiring worthless on the most recent expiration date. I got to keep the premium as I was the option seller in all 3 cases.

     So I try to collect more income in the form of option premiums.  I sold a covered call in Potash Corporation of Saskatchewan (POT) with a December 30 expiration date.  I currently own 200 shares of POT, so I attempted to sell 2 contracts. Actually my order went through twice, so I ended up with 4 contracts altogether.  My brokerage charges $9.95 + $1.00 per contract for commissions. So, with this counting as 2 separate orders, the total commission is $23.90. The premium received after commissions is $48.10.  So I contacted my broker and discussed this issue with them and they did not even give me free trades.  With my brokerage and assuming all brokerages, a pop up is suppose to come up saying "You are entering into a short position, do you want to proceed?". Then if you decide to proceed, the order comes up via a pop up to be reviewed and you click to proceed or not. Then the order is sent out into the market. This did not happen.

    After contacting my brokerage, I decided to "buy to cover" to remove the extra 2 contracts from my broker account. When you "buy to cover" an option, the option buyer pays the premium.  So this transaction cost a total of $57.95 after commissions.

Summary:

   I really need to learn to be more vocal with brokerages over issues like this.  As you can see, I lost money already on this ($48.10-$57.95=  - $9.85) . This is a small amount, but the brokerage software did not work properly.  If the option is not assigned, I will look to continue to sell covered calls at a strike price I am willing to sell at.

POT and Agrium Corporation, are set to merge in the very near future as shareholders of both companies voted  in favor of the merger.  If the merger passes all the hurdles, then a new company will be created. This keeps the stock price of POT slightly higher then my adjusted cost base.

Disclosure: Long POT and currently do not own and have never owned Agrium shares.

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.

Option Expiration Day - December 2016

  Option expiration day has come and gone.  Usually options expire on 3rd Friday of the month. I had a covered call and 2 different put option expiry worthless at expiration.

   I recently wrote about selling 9 covered call contracts in IAMGOLD (IMG.TO) stock with a $5 dollar strike price. The fed announced last week they are raising the interest rate by 25bps.  This caused fear in the gold sector and gold stocks fell a lot in value. The option was not assigned, but I still get to keep the premium received of $242.05.  Over 5% return for 8 days is more than welcome.

  I wrote about selling a naked put in Royal Bank of Canada with a $86.00 strike price, which you can read about here. The big 5 banks in Canada continued to march higher in the past few weeks.  This option was not assigned.  I get to the keep the premium received of $25.05 after commissions for being the option seller.

   I wrote about selling 2 covered call contracts in Potash Corporation of Saskatchewan (POT.TO), which you can read about here.  The number of days to expiration was 35. I received a premium minus commissions of $48.05 after commissions.  This option was not assigned.

Summary:

   With these 3 short positions on, I collected total premium of $315.15.  This is $315.15 that I did not have to go to a job in order to accumulate this amount of money.

Disclosure: Long IMG.TO, POT.TO

Disclosure:  Do not own any shares of RY.TO in any account.

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.

High Interest Savings Part #2.

       We continue this topic from the last entry.

 During the last week, the FED raised the rate by 25 BPS, or 0.25%.  This will lead to a trickle effect where the interest paid on loads and mortgages will have the interest rate increased.  This will eventually likely lead to increase in the interest rate of savings accounts.  This increase in the interest rate on savings account still keeps the interest rate small.  So a saver should try possible other options if they have a well funded emergency fund in place.

  An option is to sell deep out of the money or simply out of the money put options on stocks or ETFs.  When you sell a put option, the investor receives the option premium minus commissions upfront.  So, if the price of the stock remains above the strike price or goes sideways, the investor still gets to keep the premium and can do a rinse and repeat with the same stock or a different stock.

  If the put option is assigned, the investor purchases the stock or ETF the strike price.  So the adjusted cost basis is  calculated as follows :

       Please note:  Not all brokers charge an option assignment fee for an option seller or option exercise fee for an option buyer.

      So what can the investor due if the option is assigned. If he wants to get rid of the stock , he or she can sell a covered call.  A covered call gives the option seller the write to sell 100 shares of stock multiplied by the number of contracts at the strike price at or before expiration.  The covered call writer receives a premium up front.  An additional bonus of this method is that, the covered call option seller with receive the dividend if they owned the stock before the ex-dividend date. 

    The premium collected should not be account as income per se. Keep it in the savings account to help the balance grow.  The downside of this method is the saver can end up losing money if the stock or ETF falls in value.

Disclosure:  I used these methods from time to time in my investing accounts.
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.

High Interest Savings Account ?? - Part 1

   As we go about our daily lives, we are told to save money. But in 1971, United States President Richard Nixon took US off the gold standard.  That meant the US dollar became debt, or a currency.  Currently we have extremely low interest rates, and therefore the interest on a high interest savings account is low.  My high interest savings account current pays an annual interest rate of 0.80% per year.  This is laughable actually as it below the rate of inflation.

   Is there a different way?  I do believe an individual should should save up enough money to have an emergency fund, by saving money in the usual way.  Once the emergency fund is fully funded, an individual could buy a commission free ETF that pays a distribution yield greater than the rate of inflation.  Currently, I am doing this for savings. I currently investing in the Horizon Natural Gas Yield ETF (ticker symbol is HNY) on the Toronto Stock Exchange. The distribution yield is over 8% and pays monthly. Obviously, this will help grow you savings even quicker. I believe your investing and saving should be different.

   Is there a downside using a commission-free ETF for savings? Yes, there is a downside.  The value of the ETF could decrease in value.  So an individual should purchase the ETF at a low price and just not buy an ETF for the sake of buying an ETF. 

   I  purchased 14 units of HNY in the past month at $13.64 per unit.  Currently, the price per unit of HNY is over $15 per unit.  They just paid their monthly distribution, so I received $1.59 for being a unit holder.  Currently, with my high interest savings account I would have to have a balance of roughly $2385 to get this amount of interest per month, based on a yearly annual interest rate of 0.80%.  I invested a total of $191.01 in HNY and I received $1.59 in one month.

Please Note:  HNY is highly volatile

We continue this issue in the next entry.

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.

Option Trade

    An investor can receive cash flow from the markets in 3 ways which are option premiums, dividends and interest.  REITs, funds, and ETFs pay distributions that can be comprised of  a combination of interest, dividends, and return of capital.  Return of capital is money returned to the investor tax-free until the security is sold.  Return of capital reduces the adjusted cost basis, which therefore increases your gains or decreases your losses.

    I own 900 shares of IAMGOLD (IMG), that were purchased on the Toronto Stock Exchange. Currently, my adjusted cost base on my position is $4691.80 or $5.21/share.  The stock has traded between $4.26 and $5.89 over the past 3 months, which can be seen in the chart.

3 Month Chart

       IMG does not pay a dividend. The price of gold has been volatile as of late, which is likely due to the election of Donald Trump and what investors think of possible interest rate hike in the US.  I am looking to unload this position, but the price does not seem to go much above my adjusted cost base per share.

        I perused the option table for IMG, and decided to sell covered calls to collect some income. But, as per the chart above, IMG has been trading closer to $5 and under per share for the past 3 months.  So, I decided to sell cover calls with a strike price of $5 instead of $6.  The expiration date is December 16, 2016. 

Summary:

Option premium received minus commissions : $242.05
Days to expiration : 8
Option Assignment Fee :  $24.95
Adjusted Cost Base = $4691.80

Scenario #1: Option not assigned

Return = Option premium received /
            = $242.05 / $4500
            = 5.38 %

This return of 5.38 % is the return for only 8 days.  The interest rate on my high interest savings account is currently 0.80% per year, which is actually laughable.

Annualized return = ($242.05/$4500) *(365/8)
                               = 245.41%

Scenario #2:  Option is assigned

Return=   Profit/ Intial cost
           = { (9*100*$5.00 + $242.05 - $24.95) - $4691.80} / $4691.80
           = 0.539%

If the option is assigned, the return is still positive.

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.

Dividend Increase

        What happened Tuesday Dec 6, prior to the markets opening?  One of Canada's big 5 banks released its 4th quarter earnings.  This bank was Bank of Montreal, whose ticker symbol is BMO.  BMO trades on both the Toronto Stock Exchange and the New York Exchange.  Some of the highlights are as follows:

• 4th quarter earnings of C  $1.40 billion  vs C 1.26 billion in 2015
• Earnings growth of 11.1%  year over year
• Q4 EPS C $2.10 vs EPS C$1.90 in Q4 of 2015
• EPS Growth 10.5% year over year
• Q4 Revenue C $5.28 billion vs C $4.98 billion in 2015
• Revenue Growth 6.0% year over year

Note:  C in the bullet section stands for Canadian as in Canadian dollars

  

   Bank of Montreal's board of directors feel good going forward and decided to raised the dividend by $0.08 per year per share.  The annual dividend was raised from $3.44 per share to $3.52 per share.  This represents a 2.33% increase.  This does not seem good at first.  But the Canadian banks of been raising the dividend twice a year. The Feb 2016 dividend payment was $0.84 per share, which corresponds to an annual dividend rate of $ 3.36 per share. The dividend was then raised $0.02 per quarter per share for the Aug 2016 payment.  Therefore as you can see the annual dividend was raised from $3.36 per share to $3.52 per share.  This represents an effective increase of 4.76% over 4 quarters.

    A 4.76% increase over 4 quarters does not seem much.  Considering the unemployment rate in Alberta due to low oil prices, this increase is more than welcome.

    Currently, I own 35 shares of BMO which was purchased on the Toronto Stock Exchange. Therefore with this $0.08 per year increase, my forward annual dividend income is increase by $2.80.   This $2.80 is equivalent to investing $80 of my own money at a 3.5% yield. But I did not have to invest any of my money and got this $2.80 per year increase in my annual dividend income.  I get this increase to my annual dividend income for just being a shareholder in Bank of Montreal.

Note:  The annual dividend rate for BMO has been updated on the Investment Tab spread sheet

Disclosure:  Long BMO

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.

Dividend Update - November 2016

      The month of November is another month of dividend income landing in my accounts. This money is used to help pay my expenses if it is needed. If the money is not needed, it is ALL used to purchase new investments to further increase my cash flow.

       The markets continue to go higher in the month of November.  The price of a barrel of crude oil continues to play a major role in market sentiment. OPEC recently cut production by 1.2 million barrels per day. This caused the price of oil to go up to slightly over $50.00 per barrel recently.  I do not see the price going up much more than this in the foreseeable future.  On Nov 8, Donald Trump became President Elect of the United States.  Donald Trump is pro business, so this should be positive for the markets going forward.

      One thing for sure, is that I was paid dividends and distributions for being a shareholder or unit holder in  various companies or funds. In  Sept 2016, the Dream Office REIT in the margin account will be counted as dividend income  for the first time.

 Non-registered Account

• Bank of Montreal  (BMO) - $30.10
• Emera (EMA) = $52.25
• Enerplus (ERF)  -$ 5.58
• Dream Office REIT   (D.UN)  - $ 75.00
• Potash Corporation of Saskatchewan (POT) - $26.45
• Shaw Communications (SJR.B)    - $19.75

TFSA

• Boston Pizza  Royalties Fund (BPF.UN)   - $26.91
• Claymore 1-5 yr Laddered Corporate Bond ETF (CBO)  - $0.63
• Cominar REIT (CUF.UN ) - $20.46
• Dream Office REIT   (D.UN)  - $ 17.50
• Killam Properties REIT (KMP.UN) - $  15.10

Total = $289.73

        As the amount of distribution from D.UN inside my margin account, will have a large impact on the comparison of dividend income from 3 months or from 12 months ago.  Therefore, I will not compare November 2016 dividend income with that of 3 months and 12 months ago.

 Dream REIT has reduced the amount of distribution they pay monthly which was announced in February.  Recently, I wrote about purchasing more units of D.UN inside a margin account.  Starting in September, the distribution from this D.UN inside the margin account will be included in my dividend income.

             I currently have DRIP turned on for the following stocks in margin account, which are D.UN and ERF.  DRIP is turned on for D.UN and CUF.UN inside my TFSA.  DRIP is turned on for BNS and ENB with the transfer agents. When investing with transfer agents directly, all the dividend is reinvested as you are able to buy partial shares. When you can only purchase whole shares with DRIP, then the dividend received has to be higher than the price of the stock to receive at least one share.

     I will update my dividend income tab with the new amount. It is great to see money from passive income sources deposited into my brokerage account every single month.

How was your dividend income for November 2016?

Disclosure : Long all securities above.

Photo Credit: www.mipaq,co.za

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.

Portfolio Update - November 2016

       The month of November 2016 is now behind us. What a month as we had 2 major events occur. Donald Trump become President Elect of the United States and OPEC agreed to cut oil production by 1.2 million barrels per day. The latter caused a jump in oil prices to slightly above $50 a barrel for WTI Crude Oil.

      On November 11, I sold 2 call option contracts on the 200 shares of Potash Corporation of Saskatchewan (POT) that I currently own which you can read here. The strike price is $25 with a December 16, 2016 expiration date. 

       On November 14, I wrote about purchasing 39 units of Horizon's Natural Gas Yield ETF, whose ticker symbol is HNY on the Toronto Stock Exchange.  My brokerage provides the opportunity to purchase most ETFs commission free.

      November 18 was option expiration day as it is the third Friday of the Month.  I recently sold 3 call contracts with a $6.00 strike price and 3 put options with a $5.00 strike price.  The 3 put option contracts was assigned at expiration, which you can read about here.  I decided to sell 3 put option contracts at $5.00, in order to average down on my position of  IAMGOLD (Ticker Symbol IMG).  When an investor or trader sells a put option, they are obligated to BUY 100 shares of in the underlying stock.  By selling an put option, an investor can collect a premium up front, for something he or she is willing to do anyway.  So, after this put option assignment I owned a total of 600 shares altogether.

     I purchased an additional 300 shares of IMG as the price was lower than $5.00 a share.  With 900 shares and my adjusted cost basis being around $5.22 a share, I am looking to unload these shares with a direct sell or by selling covered calls.  I did not write a post about this purchase. 

      On November 23, I wrote about different Pathways to Retirement. As lot of people invest in Registered Retirement Savings Plans such as a 401k in the United States and RRSP in Canada. These accounts are savings plans where an investor hopes the money grows and stays above the amount they contributed.  Therefore, these plans will affect an investor's net worth.  An investor in a non-registered account can invest for cash flow or capital gains. The cash flow can come from dividends  interests, and selling options to collect premiums upfront.

      On November 29, I wrote about purchasing 50 shares of High Liner Foods Inc (HLF) at $19.99 per share.  HLF trades on the Toronto Stock Exchange.  As people live busy lives and the health recommendations of eating a certain amount of seafood for things such as Omega 3 fatty acids, people will often purchase Frozen Fish products, to reduce their trips to the grocery stores.  HLF also sells their products to restaurants.  I purchased one of their products today at the grocery store today, as it was on sale.

I recently wrote about selling a put option in Royal Bank (RY) with a strike price of $86.00 and an expiration date of December 16, 2016.  A few days after selling this put option, Royal Bank released its earnings.  Investors reacted negatively to these earnings and the stock fell a few dollars but still remained about my strike price.

 Shares Acquired Through DRIP

1 Unit of D.UN.TO @ $16.8635 for a total cost of $16.86           (TFSA)
1 Unit of CUF.UN.TO @ $13.8035 for a total cost of $13.80      (TFSA)

4 Unit of D.UN.TO @ $16.8635 for a total cost of $67.45 (Margin Account)

As of Dec  1,  2016, the value of the portfolio is $96166.29.  This is a 2.22%  decrease over last month's total.  The spreadsheet in the investment tab above has been updated.

 Disclosure:   Long HLF, IMG, RY, HNY

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.

Option Trade - Royal Bank

      
      I am looking to establish another position with Royal Bank. The stock was currently trading around $89.00 a share after the recently earnings release from Bank of Nova Scotia. The closing price on November 28 was $89.27.

    On Nov 28, I sold 1 put contract on RY with a strike price of $86.00 and expiration date of December 16.  I collected a total premium of  $25.05 after commissions.

Summary:

Strike Price: $86.00
Total Premium Received : $25.05
Days to Expiration: 18
Current Annual Dividend = $3.32
 Option Assignment Fee = $24.95

Scenario #1 :  Option not assigned

Total Return = $25.05 / (1*100*$86.00)
                     = .0029
                     = 0.29%

The total return for 18 days is 0.29%.  The annualized return is 6.08%.  My high interest savings accounts pays an annual interest of 0.80%.

Scenario #2:  Option is Assigned 

Adjusted Cost Base  per share= [1*100*86.00 - $25.05 +$24.95] / 100
                                                = $86.00

This would represent a discount of 3.66 % on the closing price of $89.27 on November 28.

Yield on Cost = $3.32 /$86 *100 %
                       = 3.860%

 What would the yield be if shares purchased directly at $86?

Commission = $4.95

ACB/per share = [1*100*$86.00 +$4.95 ] / 100
                         = $86.04

Yield on Cost = ($3.32 / $86.04) * 100%
                       = 3.859 %

The yield on cost appears to be the same almost. If the premium received was higher, then the yield on cost for the option assignment would be greater as the adjusted cost basis would be a lower dollar figure.

Please Note:  As of the time of this writing, Royal Bank was fallen in price after releasing earnings but still above $86.00.

Disclosure:  I do not own any shares of RY in any accounts as of this writing.

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.