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Friday, October 29, 2010

MCD Covered Call Timeline

10/29/2010

Buy 100 shares of McDonald's (MCD) @ $77.78
Sell to open one Jan 2011 $80 call @ $1.14

Net profit: $114


Reasons for this trade:

- P/E = 17.10
- good earnings released on 10/21/2010
- Beta = 0.60
- 50 EMA and 200 EMA trending up
- $0.61/share dividend payable on 12/15/2010 (ex-div 11/29/2010)

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12/15/2010

Dividend: $0.61/share

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1/21/2011

Jan 2011 call expired. No assignment.

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2/14/2011

Sell to open June 2011 $80 call @ $0.97

Net profit: $97

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3/15/2011

Dividend: $0.61/share

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5/18/2011

Buy to close June 2011 $80 call @ $1.61
Sell to open Dec 2011 $80 call @ $4.00

This is a "spread" trade, one commission

Net profit: $239

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This options trader teaches at Lilia's Investing Academy. For more details, click here.