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In May 2003 BHP was channelling. This is a step-by-step walkthrough of a covered call writing strategy that was conducted using margin lending.
9th May 2003: Buy 10,530 BHP shares (10 contracts) at $8.55 - $90,031 at 75% margin means committing $22,112.50 brokerage (0.14%) - $126.53 22nd May – Wrote Covered Call 2nd June – Wrote Covered Call (last one expired worthless) 13th June – Buy Put contract for Insurance purchase 24th June – extend the covered call 25th June – change Put contract strike price (insurance) 3rd July – Buy back the Covered Call
22nd July – sold 10,053 BHP shares @ $9.22 – received $97,086.60
31st May – Interest charged for May; $191.58 So a sum total profit of $12,029.28 was received from committing an initial margin of $22,112.50 |
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Combined Trades |
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2011 |
2010 |
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2009 |
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All figures based on a starting bank of $10,000 on the 1st January each year. For all trade details to recent date click here Past Performances |
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