Wednesday, 25 March 2015

Options Trade - CSX

Earlier this week, I placed a limit order which went through today. The trade:

Sold 1 CSX Put Jan 15 '16 $30 Put @ 1.55 ($11.20 commission + $0.01 SEC fee)

Days Held (sell date to expiry): 296
Net Premium: $143.79

Annualized Return = ($143.79 / ($3,000 - $143.79)) * 365/296 = 6.2%

I don't mind the "low" return because I feel the risk I'm taking is also low.

The most likely outcomes of this trade are:
  1. Shares are trading above $30 at expiration. I will get to keep $143.79 in net premiums.
  2. CSX is trading below $30 at or before expiration and shares are assigned. I will receive 100 shares of CSX at a net cost of $28.56/share.


2 comments:

  1. Annualized Return at 6.2% is really good, from what I see. I am not familiar with this stock though. Need to do some homework. Thanks for bringing it to my attention.

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    Replies
    1. I think CSX is a good long-term investment. I already own some, and would add at the right price.

      cheers

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