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Trade adjustment – Demand Media (DMD) – new covered call (11.24% gain)

Another stock I used for covered call writing in my portfolio was Demand Media (DMD). You can see the previous trades here.

As you can see I opened the first covered call in December last year. The trade didn’t go as well as I would expect (the stock wasn’t called away), so I bought back almost worthless covered call and sold a new one. Since then the trade progressed in my favor and brought 11.24% gain as of the last Friday (31.60% annualized return).

Since the last covered call expired worthless this morning I could sell another covered call against this stock, generate more income, and improve overall trade.

Trade Detail

This morning I sold another covered call:

05/20/2013 09:30:02 Sold 1 DMD Nov 16 2013 10.0 Call @ 1.2

 

Own 100 shares DMD: $9.50
Strike: $10.00
Sold 1 Covered Call: $1.20
Total Purchase: $120.00
Commissions: $8.78
Total purchase: $751.31
Expected Option Assignment: $1000.00
Option Assignment Fee: $19.00
Expected Proceeds: $981.00
Expected Net Gain: $229.69
Expected ROI: 30.57%

This trade added to my overall income generated in May 2013 to be $220 so far. This helped me to meet and maintain my goal to generate monthly at least $100 thru options trading. If this trend continues I should be able to exceed my goal.

How are you generating income from your investments?





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