Recent Sale

 On October 1, 2018, I purchased 100 shares of Telus Corporation (T.TO) inside my margin account.  I purchased with the attention of selling covered calls.  A covered call is when you sell (or write) a call option when you own the corresponding number of shares for said contract.

When selling covered calls, the individual is obligated to sell their shares at or on expiration date.  For this obligation, the seller of the call option is paid upfront an option premium.  The option seller gets to retain this premium regardless if the stock moves up, down or sideways.  If the price of the stock is $0.01 above the strike price at expiration the option will be assignment.

The initial cost basis of the shares is $4743.30.

Total dividends received = $109.00
Total Options received = $78.10 ( $44.05 and $34.05 on 2 trades )
Option Assignment Fee = $24.95
Strike Price = $48.00

When a covered call is assignment, the premium is added to the proceeds of sale resulting in a larger capital gain or capital loss for tax purposes.

When the covered called is not assigned, the gross proceeds of sale is the premium received and the outlays and expenses is the commission for the option trade by your brokerage.  The adjusted cost basis is $0.00.


Summary:

Net profit on assignment = # of contracts * strike price * 100 shares + net premium - assignment fee
                                         = 1* $48 *100 + $34.05 - $24.95
                                         = $4809.10

For total return we use all the money received

Total return =[ (net profit on assignment + other premium received + divys )  / ACB on purchase]  - 1
                    = [($4809.10 + $44.05 + $109.00)  / $4743.30]  - 1
                    = 4.62%

The total return is not that high. In the past month, T.TO increased to over $50.00 per share and then retracted to mid $49.00.

Telus currently pays an quarterly divided of  $0.545.  This option assignment reduces my annual dividend income by $218.00 

I will update my investing tab spreadsheet in early May to reflect this transaction.


Disclosure:  - Own 24 shares of T.TO in my TFSA
                        - Long T.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.

Trading Account Update: April 2019

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 :                45
                               Total Capital added:    $250.00
                               Trading Acct Balance:  $3045.58
                               Average Drawdown:   $112.90
                               Average Loss:             $287.20
                               Average Accuracy:    82.22%
                               Average Risk:              $127.44
                               Average Reward:         $106.37
                               Average R/R :             1: 0.835

        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? No it does not.  The risk to reward ratio states of every $1.00 of risk there is reward of  $0.835.  Ideally, a trader should aim for a 1:2  risk to reward ratio which causes the accuracy rate to be lower.  I lost big on a trade as I did not put a stop in at the initiation of the PZA.TO trade.  The stock kept dropping and dropping, so I felt it was best to sell.   

      The drawdown above is inter-trade drawdown.  This type of draw down is the dollar amount the trade moves against you.  Why is it important to keep track of inter-trade drawdown?  It helps you know if you are picking good entry points.  It is normal for trades to have inter-trade drawdown. 

Note:  The trades are listed under the Trading Tab above with all the trades listed as of April 13, 2019

Note:  As of April 13, 2019, there is no active trades. 

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 Income Update - March 2019

      

        The month of March 2019 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.

       

 Non-registered Accounts

• Cineplex  (CGX) - $14.50
• Enbridge (ENB) - $19.40  (Transfer Agent)
• Enbridge (ENB) - $221.40 (Margin Account)
• Enerplus (ERF)  -$ 5.58 
• High Liner Foods (HLF) - $43.65
• Shaw Communications (SJR.B)  - $19.75
• WestJet Airlines (WJA.TO) - $28.00

Subtotal :  $352.28

TFSA

• A&W Royalties Income Fund (AW.UN) - $5.59
• Boston Pizza Royalties Income Fund   (BPF.UN) - $26.91
• Brookfield Renewable Partners LP (BEP.UN) - $22.54
• Canadian National Railway (CNR) - $20.43
• Cominar REIT (CUF.UN) - $12.90
• Dream Office REIT   (D.UN)  - $14.00
• Enbridge (ENB) - $24.35
• Killam Properties REIT (KMP.UN) - $  16.11

Subtotal:  $142.83

Total = $495.11

    I received a total of $495.11 in dividend income for the month of March 2019.  This represents a 3.45% increase from 3 months ago and 6.31% increase year over year.  

    

    I received $0.00 within my investment accounts in March 2019.

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

How was your dividend income for March 2019?

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.