Sunday, October 21, 2007

October 2007 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained 11 positions with Oct07 expirations with the following results:
- 8 positions closed in-the-money so the calls were exercised and the stock was called away. Details of each of these transactions are presented below.
- 1 position (MRK) was also in-the-money, but the October option was covered and a new Nov07 covered call position was established.
See MRK Roll Out link
- 2 positions (HON and UNH) ended out-of-the-money. Decisions will be made to either sell the stock, or to establish Nov07 covered call positions against these stock holdings. The related transactions will be made Monday morning and the actual transactions will be posted at that time.

The 8 closed positions and each of their annualized return-on-investment (ROI) %s are summarized as follows:
BMC Software -- 39.2%
Fluor -- 75.1%
Hewlett Packard -- 34.9%
iShares MSCI EAFE ETF -- 31.3%
Materials Select Sector SPDR ETF -- 35.8%
Nike -- 37.2%
Oil Service HOLDRS Trust ETF -- 42.7%
Travelers Cos. -- 44.6%

The transactions history and performance results for each of these 8 covered call positions is provided below:

1. BMC Software – Closed

Transactions History:
9/17/07 Initial Stock Position -- Bought(BTO)500 BMC @ 30.50
9/17/07 Initial Call Options -- Sold (STO) 5 Oct07 30 Calls @ 1.65
10/20/07 Option Exercised – STC 500 BMC @ $30.00

Performance Results(including commissions):
Stock Purchase Cost: $15,259.95 ($30.50*500+$9.95 commissions)
Option Income: $811.30 ($1.65*500-$13.70 commissions)
Capital Appreciation: -$269.90 [($30.00*500-$9.95)-$15,259.95]
Net Profit: $514.40 ($811.30-$269.90)

ANNUALIZED RETURN ON INVESTMENT:
(514.40/15,259.95)*(365/33 days) = 39.2%


2. FLR – Closed

Transactions History:
9/18/07 Initial Stock Position -- BTO 100 FLR @ $138.17
9/18/07 Initial Call Option -- STO 1 FLR Oct 140 @$4.90
10/2/07 Roll Up Transaction -- BTC 1 FLR Oct 140 @ $11.60
10/2/07 Roll Up Transaction -- STO 1 FLR Oct 150 @ $4.50
10/20/07 Option Exercised – STC 100 FLR @ $150.00

Performance Results(including commissions):
Stock Purchase Cost: $13,826.95 ($138.17*100+$9.95 commissions)
Option Income: -$249.85 ($490-$1160+$450-$29.85 commissions)
Capital Appreciation: $1,163.10 [($150.00*100-$9.95)-$13,826.95]
Net Profit: $913.25 ($1,163.10-$249.85)

ANNUALIZED RETURN ON INVESTMENT:
(913.25/13,862.95)*(365/32 days) = 75.1%


3. Hewlett Packard – Closed

Transactions History:
9/11/07 Initial Stock Position -- Bought 500 HPQ @ 49.78
9/11/07 Initial Call Options -- Sold 5 Oct07 50 Calls @ 1.75
10/20/07 Option Exercised – STC 500 HPQ @ $50.00

Performance Results(including commissions):
Stock Purchase Cost: $24,899.95 ($49.78*500+$9.95 commissions)
Option Income: $861.30 ($1.75*500-$13.70 commissions)
Capital Appreciation: $90.10 [($50.00*500-$9.95)-$24,899.95]
Net Profit: $951.40 ($861.30+$90.10)

ANNUALIZED RETURN ON INVESTMENT:
(951.40/24,899.95)*(365/40 days) = 34.9%


4. iShares MSCI EAFE ETF – Closed

Transactions History:
9/11/07 Initial Stock Position -- BTO 400 EFA @ 77.75
9/11/07 Initial Call Options -- STO 4 Oct07 78 Calls @ 2.50
10/20/07 Option Exercised – STC 400 EFA @ $78.00

Performance Results(including commissions):
Stock Purchase Cost: $31,109.95 ($77.75*400+$9.95 commissions)
Option Income: $987.05 ($2.50*400-$12.95 commissions)
Capital Appreciation: $80.10 [($78.00*400-$9.95)-$31,109.95]
Net Profit: $1,067.15 ($987.05+$80.10)

ANNUALIZED RETURN ON INVESTMENT:
(1,067.15/31,109.95)*(365/40 days) = 31.3%


5. Materials Select Sector SPDR ETF – Closed

Transactions History:
9/12/07 Initial Stock Position -- BTO 200 XLB @ 38.84
9/12/07 Initial Call Options -- STO 2 Oct07 39 Calls @ 1.45
10/20/07 Option Exercised – STC 200 XLB @ $39.00

Performance Results(including commissions):
Stock Purchase Cost: $7,777.95 ($38.84*200+$9.95 commissions)
Option Income: $278.15 ($1.45*200-$11.85 commissions)
Capital Appreciation: $12.10 [($39.00*200-$9.95)-$7,777.95]
Net Profit: $290.25 ($278.15+$12.10)

ANNUALIZED RETURN ON INVESTMENT:
(290.25/7,777.95)*(365/38 days) = 39.2%


6. Nike Inc. – Closed

Transactions History:
9/7/07 Initial Stock Position -- BTO 500 NKE @ 54.83
9/7/07 Initial Call Options -- STO 5 NKE Oct07 55 Calls @ 2.30
10/20/07 Option Exercised – STC 500 NKE @ $55.00

Performance Results(including commissions):
Stock Purchase Cost: $27,424.95 ($54.83*500+$9.95 commissions)
Option Income: $1,136.30 ($2.30*500-$13.70 commissions)
Capital Appreciation: $65.10 [($55.00*500-$9.95)-$27,424.95]
Net Profit: $1,201.40 ($1,136.30+$65.10)

ANNUALIZED RETURN ON INVESTMENT:
(1,201.40/27,424.95)*(365/43 days) = 37.2%


7. Oil Service HOLDRS Trust ETF – Closed

Transactions History:
9/12/07 Initial Stock Position -- BTO 200 OIH @ 184.35
9/12/07 Initial Call Options -- STO 2 Oct07 185 Calls @ 7.70
10/20/07 Option Exercised – STC 200 OIH @ $185.00

Performance Results(including commissions):
Stock Purchase Cost: $36,879.95 ($184.35*200+$9.95 commissions)
Option Income: $1,528.15 ($7.70*200-$11.85 commissions)
Capital Appreciation: $110.10 [($185.00*200-$9.95)-$36,879.95]
Net Profit: $1,638.25 ($1,528.15+$110.10)

ANNUALIZED RETURN ON INVESTMENT:
(1,638.25/36,879.95)*(365/38 days) = 42.7%


8. Travelers Cos. – Closed

Transactions History:
9/10/07 Initial Stock Position --BTO 500 TRV @ 49.37
9/10/07 Initial Call Options -- STO 5 TRV Oct07 50 Calls @ 1.85
10/20/07 Option Exercised – STC 500 TRV @ $50.00

Performance Results(including commissions):
Stock Purchase Cost: $24,694.95 ($49.37*500+$9.95 commissions)
Option Income: $911.30 ($1.85*500-$13.70 commissions)
Capital Appreciation: $295.10 [($50.00*500-$9.95)-$24,694.95]
Net Profit: $1,206.40 ($911.30+$295.10)

ANNUALIZED RETURN ON INVESTMENT:
(1,206.40/24,694.95)*(365/40 days) = 44.6%


The performance of the overall Covered Calls Advisor Portfolio (CCAP) as measured by the total portfolio value will be posted on this site monthly on the last day of each calendar month. The initial posting for the monthly overall CCAP performance results will therefore be on October 31, 2007.

Regards and Godspeed

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