Wednesday, 4 March 2015

Options Trade - Loblaw's


On March 3, I sold a put option in Loblaw’s.

Sold 1 L Put Oct 16 '15 $60.00 Put @ 3.40 ($11.20 commission)

My net premium is $328.80.

Days Held (sell date to expiry): 227
Net Premium: $328.80

Annualized Return = ($328.80 / ($6,000 - $328.80)) * 365/ 227 = 9.3%


The most likely outcomes of this trade are:

1. Shares are trading above $60.00 at expiration. I will get to keep the $328.80 in premiums.

2. L is trading below $60.00 at or before expiration and shares are assigned. I will receive 100 shares of L at a cost of $56.72/share.

2 comments:

  1. Hi great blog, very informative. What are the tax/exchange rate consequences for Canadians buying either US securities or foreign adr's for a regular trading account?

    Thank You

    ReplyDelete
    Replies
    1. Tax consequences are different depending on the type of income (i.e. capital gains, dividends), the type of account (i.e. RSP, TFSA, non-registered) and the country where the company is headquartered. The answer to your question is quite lengthy and is covered extensively by the media (e.g. Globe and Mail).

      Thanks for stopping by.

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