Recall that my DivGro portfolio is distributed across several brokerage accounts. As far as possible, I try not to have the same stock in multiple accounts. I prefer simplicity, and splitting a position across multiple accounts adds unnecessary admin. When I consolidated all my brokerage accounts into the DivGro's fold, some duplicate positions came along for the ride.
Another reason I want to "clean things up" is to cater for options trading – specifically covered calls – which requires 100 shares for every options contract. Split positions across multiple accounts do not qualify for covered call trades. I'll be using the cash from these sells to round out more of my positions to 100 shares or multiples of 100 shares.
Following are details of four sell trades executed on 23 December.
The Walt Disney Company
On Wednesday I reported buying 100 shares of The Walt Disney Company (DIS) on 5 December before the ex-dividend date. I increased my position to 227 shares and will collect the semi-annual dividend of 78¢ in January on those 227 shares.
On 23 December, I sold 27 shares of DIS for $105.20 per share. As mentioned, these shares were in my FolioInvesting account, whereas the 200 remaining shares are in my Scottrade account.
Here is a price chart depicting my buy and sell prices:
Trading Summary| 2015-01-27 | Bought 27 shares of DIS at $94.32 per share: | $ | 2,546.58 |
| 2015-07-29 | Dividend on 27 shares at 66¢ per share: | $ | 17.82 |
| 2015-01-11 | Dividend on 27 shares at 71¢ per share: | $ | 19.17 |
| 2016-07-28 | Dividend on 27 shares at 71¢ per share: | $ | 19.17 |
| 2016-12-23 | Sold 27 shares of DIS at $105.20 per share: | $ | 2,840.34 |
| 2017-01-11 | Dividend on 27 shares at 78¢ per share: | $ | 21.06 |
Capital gain:
|
$
|
293.70
| |
Dividends received:
|
$
|
77.22
| |
Commissions/fees/taxes:
|
$
|
0.00
| |
Net gain:
|
$
|
370.98
|
I made a net gain of 14.57% on the original amount invested, or 7.64% annualized.
PennantPark Investment Corp
Unfortunately, PNNT froze its dividend right when I bought those shares. Rather than sell the shares, I argued that I could afford to take on more risk for such a high yield. Not long after buying the shares, PNNT took a nosedive all the way down to $4.65:
I considered cutting my losses on several occasions, but taking such a big loss would have been rather painful. Fortunately, the share price started to recover, though getting back to $11.63 is still a long way off!
Earlier this year I decided to buy more shares in hopes of accelerating the recovery. So far, the trade is paying off and I'm up a few percentage points overall. However, I decided to sell the original shares now and to keep the new batch (785 shares) a little longer.
So on 23 December, I sold 215 shares of PNNT for $7.76 per share. As a result, DivGro's PADI is decreased by $240.80.
Following is an updated chart showing my original entry price and the exit price:
Though the trade looks like a big losing trade, PNNT's dividends made up for the capital loss:
| 2013-09-10 | Bought 215 shares of PNNT at $11.62 per share: | $ | 2,498.37 |
| 2013-10-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2014-01-02 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2014-04-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2014-07-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2014-10-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2015-01-02 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2015-04-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2015-07-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2015-10-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2016-01-04 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2016-04-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2016-07-01 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2016-10-03 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
| 2016-12-23 | Sold 215 shares of PNNT at $7.76 per share: | $ | 1,668.38 |
| 2017-01-03 | Dividend on 215 shares at 28¢ per share: | $ | 60.20 |
Capital loss:
|
$
|
829.99
| |
Dividends received:
|
$
|
842.80
| |
Commissions/fees/taxes:
|
$
|
3.00
| |
Net gain:
|
$
|
9.81
|
I made a net gain of 0.39% on the original amount invested, or 0.12% annualized.
Qualcomm Inc
I first bought shares of Qualcomm Inc(QCOM) in July 2015, noting that the company is shareholder friendly and had $31 billion in cash and marketable securities on hand at the end of 2014, with practically no debt! The company also licenses many of its 5,700+ patents and intellectual property to wireless equipment manufacturers.
I still like QCOM and have 200 shares in my Scottrade account. Those shares have an average cost basis of $67.92 and an average YoC of 3.12%.
On 23 December, I sold 100 shares that were in my FolioInvesting account for $66.61 per share. As a result of this sell, DivGro's PADI decreases by $212.
Here is a chart showing my entry prices and exit price:
Notice that I bought the majority of these shares in November 2015 near the 52-week low, so my investment has paid off handsomely!
Trading Summary
| 2015-07-16 | Bought 10 shares of QCOM at $64.43 per share: | $ | 644.30 |
| 2015-09-23 | Dividend on 10 shares at 48¢ per share: | $ | 4.80 |
| 2015-11-24 | Bought 90 shares of QCOM at $49.32 per share: | $ | 4,438.80 |
| 2015-12-18 | Dividend on 100 shares at 48¢ per share: | $ | 48.00 |
| 2016-03-23 | Dividend on 100 shares at 53¢ per share: | $ | 48.00 |
| 2016-06-22 | Dividend on 100 shares at 53¢ per share: | $ | 53.00 |
| 2016-09-21 | Dividend on 100 shares at 53¢ per share: | $ | 53.00 |
| 2016-12-16 | Dividend on 100 shares at 28¢ per share: | $ | 53.00 |
| 2016-12-23 | Sold 100 shares of QCOM at $66.61 per share: | $ | 6,661.00 |
Capital gain:
|
$
|
1,577.90
| |
Dividends received:
|
$
|
259.80
| |
Commissions/fees/taxes:
|
$
|
0.14
| |
Net gain:
|
$
|
1,837.56
|
I made a net gain of 36.15% on the original amount invested, or 32.08% annualized.
Gap Inc
Unfortunately, GPS took a nosedive shortly after I bought my shares, from which it is yet to recover. After somewhat stabilizing in 2016, I bought more shares and significantly reduced my cost basis. However, GPS has continued to struggle and I decided to close out the position and write off the loss against this year's capital gains.
So, on 23 December I sold all 165 shares of GPS at $22.68 per share, which results in a reduction of DivGro's PADI by $151.80.
Below is a chart showing my buy and sell prices:
| 2015-03-16 | Bought 60 shares of GPS at $41.42 per share: | $ | 2,485.20 |
| 2015-04-29 | Dividend on 60 shares at 23¢ per share: | $ | 13.80 |
| 2015-07-29 | Dividend on 60 shares at 23¢ per share: | $ | 13.80 |
| 2015-10-28 | Dividend on 60 shares at 23¢ per share: | $ | 13.80 |
| 2016-01-27 | Dividend on 60 shares at 23¢ per share: | $ | 13.80 |
| 2016-04-25 | Bought 105 shares of GPS at $23.40 per share: | $ | 2,456.48 |
| 2016-04-27 | Dividend on 60 shares at 23¢ per share: | $ | 13.80 |
| 2016-07-27 | Dividend on 165 shares at 23¢ per share: | $ | 37.95 |
| 2016-10-26 | Dividend on 165 shares at 23¢ per share: | $ | 37.95 |
| 2016-12-23 | Sold 165 shares of GPS at $22.68 per share: | $ | 3,742.20 |
Capital loss:
|
$
|
1,199.48
| |
Dividends received:
|
$
|
144.90
| |
Commissions/fees/taxes:
|
$
|
0.59
| |
Net loss:
|
$
|
1.055.17
|
I made a net loss of -21.34% on the original amount invested, or -17.53% annualized.
Conclusion
As this is my last post of 2016, I want to wish my readers a happy and prosperous new year! Thanks so much for your encouragement and support!
Thanks for reading! Let me know what you think of this options trade in the comments below.
Hi Ferdi,
ReplyDeleteI think it's a good move to get out of the Folio account. I'm doing something similar with my former Sharebuilder account, and am slowly transferring shares to my main brokerage.
Congrats on beating your 2016 goals with $12k forward income - that's awesome!
Best wishes for 2017,
-DL
Which brokerage are you transferring to?
DeleteI transferred my Roth IRA from Sharebuilder to Fidelity not too long ago. I had that account for like 8 years, but Sharebuilder got sold to ING Group, and then got sold to Capital One, and they simply weren't very good anymore.
DL -- best wishes for 2017 to you, too!
DeleteI decided to transfer both my Scottrade and my main FolioInvesting account to Interactive Brokers. The reason is much more flexibility in options trading due to lower commissions. Also, I'd be able to roll options forward when necessary. Scottrade was a good learning environment, but now they've sold themselves to TD Ameritrade. I don't want to deal with the uncertainty surrounding that transition. Also, Scottrade just charges too much for options trading. Especially the $17 assignment fee is irritating!
Yeah it's funny how an option strategy results in portfolios looking so clean. ^-^
ReplyDeleteYears ago, I had different holdings with random amounts of shares, and fractional shares from reinvested dividends. But now over the past several years, every single holding is in blocks of 100.
Agreed. Most of my stocks will end up as 100 shares or multiples thereof. I do have a few funds that this won't happen to, though, since I'm not going to do options on them.
DeleteAll the best for 2017!
What a good outcome for you. 3/4 is a pretty good win rate. All the best for 2017. Cheers
ReplyDeleteThanks, Buy, Hold Long!
DeleteAll the best to you for 2017 as well!