In a perfect world, all of my option contracts would expire worthless. Welcome to the real world. I’m pretty lucky so far, most of my contracts either expire worthless or I buy to close them for a profit. I sold a cash secured put against VFC Corporation on December 13th. This option was assigned on Friday, January 20th. I’m now the proud owner of 100 more shares of VFC.
VFC Option Details
- Contract Length: 38 Days
- Opening Fees :$6.46
- Strike Price: $57.50
- Premium: $1.92
- Annualized Rate of Return: 21.98%
- Realized Profit: $185.54
At market close on Friday I bought 100 shares of VFC stock at a strike price of $77.50 per share. I was paid a premium of $192 dollars. After trading fees, this premium dropped my purchase price to $55.58 per share. VFC closed at $51.85 on Friday. This means I paid $3.73 more per share than market value, or a loss of $373 dollars.
Although I would’ve loved to have this option expire worthless, I don’t view this transaction as if I was beat up; unlike Kermit. I’ll sell covered calls on this stock and be positive in short order. I’ll also be collecting quarterly dividend income of $42 dollars.
This latest VFC stock buy, takes my total shares owned to 200. My overall cost basis of these shares is $52.56 per share. This is $0.71 cents per share above current market value.
I’ll likely be selling a VFC covered call tomorrow. If you’re interested in learning more about VFC and its product line, checkout my purchase analysis.