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Monday, October 22, 2007

Honeywell -- Continuation Transaction

The following transaction was made today to continue the covered calls written against the 500 shares on HON:

10/22/07 Covered Calls Continuation Transaction -- STO 5 Nov07 57.5 Calls @ $2.25


The Transactions History to date is as follows:

9/10/07 Initial Stock Position -- BTO 500 HON @ 54.23
9/10/07 Initial Call Option -- STO 5 HON Oct07 55 Calls @ 1.80
9/26/07 Roll Up Transaction -- BTC 5 HON Oct 55s @ $4.70
9/26/07 Roll Up Transaction -- STO 5 HON Oct 60s @ $1.10
10/20/07 Oct’07 Option Expiration Date – HON closed below the strike price at $58.32
10/22/07 Covered Calls Continuation Transaction -- STO 5 Nov07 57.5 Calls @ $2.25


The Performance Results potential (including commissions) if the current position is called is as follows:
Stock Purchase Cost: $27,124.95 ($54.23*500+$9.95 commissions)
Option Income: +$181.45 ($180*5-$470*5+$110*5+225*5-$43.55 commissions)
Capital Appreciation: $1,615.10 ($57.50*500-$9.95 -$27,124.95)
Net Profit: $1,796.55 ($181.45 + $1,615.10)


ANNUALIZED RETURN ON INVESTMENT IF CALLED:
(1,796.55/27,124.95)*(365/61 days) = 39.6%

4 comments:

  1. Jeff, you state that for HON you STO 5 Nov07 57.5 Calls @ $2.25. According to CyberTrader/Schwab the high so far today (10/22/07) for the stated option (HONKY) is $2.15. Were you stating that the order was actually executed or that the order was just placed? If executed, on what exchange and thru whom did you get $2.25?
    Thanks, TexasTrader

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  2. Trade filled at 9:35:18am at $2.25 via Options Xpress in my Covered Calls Advisor Portfolio CBOE Virtual Trader account.

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  3. So, these aren't real money trades?

    ReplyDelete
  4. Correct. These are not real money trades. As stated in my post on 9/20/07, 'All trades were made in a CBOE Virtual Trader account powered by Options Xpress.' Although I hold many of the same positions in my own portfolio, I decided to establish a separate virtual account for the Covered Calls Advisor Portfolio, which is intended to be an informational and educational resource on covered calls investing.

    ReplyDelete