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May 16th, 2013 at 7:45 am
Craig,
My thanks also for your efforts.
I did have two questions (a function of my deficient arithmetic skills, I'm sure):
#1 – I follow your math down to a cost basis of $24.35 (after selling the $25 c for .48), but after closing the 21/16 put spread at a $2.49 loss, and buying 100 CLF @17.67, I get a cost for 200 sh at an average cost of of $22.255 instead of your 22.91. ($24.35 + 2.49 = 26.87 plus 17.67 = 44.51/2 = 22.255) . Where did my I go astray?
#2 Using your final figure of $21.27 (mine is 20.61, after the I.09 and .55 credits), if we were called away @$22 in June, then the annual return would be .73 for 3 mths (or 2.92 for 12 mths) which is a 13.7% annual return (not bad by any stretch for a conservative strategy, but I don't see how you got a 20% return). Interestingly, using my final cost figure of $20.61, I get a 27% return!! What did I miss?
My thanks in advance for reviewing the above.