Wednesday, December 26, 2007

Halliburton, Hewlett Packard, and Kinetic Concepts -- Continuation Transactions

1. Halliburton (HAL) Continuation Transaction

The following transaction was made today to continue the covered calls written against the 700 shares of HAL:
12/26/07 Covered Calls Continuation Transaction -- STO 7 Jan08 37.5 Calls @ $1.05

The Transactions History to date is as follows:
10/24/07 Initial Stock Position -- Bought 700 HAL @ 40.01
10/24/07 Initial Call Options -- Sold 7 HAL Nov07 40 Calls @ $1.25
11/17/07 Nov07 Option Expiration Date – HAL closed below the strike price at $37.02
11/19/07 Covered Calls Continuation Transaction -- STO 5 Dec07 37.5 Calls @ $.85
11/29/07 Ex-Dividend Date -- $.09*700
12/22/07 Dec07 Option Expiration Date – HAL closed below the strike price at $37.29
12/26/07 Covered Calls Continuation Transaction -- STO 5 Jan08 37.5 Calls @ $1.05

The overall performance results(including commissions)for the HAL transactions through Jan08 expiration would be as follows:
Stock Purchase Cost: $28,016.95
($40.01*700+$9.95 commission)

Net Profit:
(a) Options Income: $2,159.40 (700*$1.25 + 700*.85 + 700*1.05 - 3*15.20 commissions)
(b) Dividend Income: $63.00 ($.09*700)
(c) Capital Appreciation (If stock price unchanged from $37.29): -$1,923.90
= (40.01-37.29)*700 - 2*9.95 commissions
(c) Capital Appreciation (If exercised): -$1,776.90
= (40.01-37.50)*700 - 2*9.95 commissions

Total Net Profit(If stock price unchanged at $37.29): +$298.50
= ($2,159.40+$63.00-$1,923.90)
Total Net Profit(If stock price exercised at $37.50): +$445.50
= ($2,159.40+$63.00-$1,776.90)

Annualized Return If Unchanged (ARIU) +4.5% (+$298.50/$28,016.95)*(365/87)
Annualized Return If Exercised (ARIE) +6.7% (+$445.50/$28,016.95)*(365/87)


2. Hewlett Packard (HPQ) Continuation Transaction

The following transaction was made today to continue the covered calls written against the 500 shares of HPQ:
12/26/07 Covered Calls Continuation Transaction -- STO 5 Jan08 42.5 Calls @ $1.20

The Transactions History to date is as follows:

11/28/07 Initial Stock Position -- Bought 500 HPQ @ 49.96
11/28/07 Initial Call Options -- Sold 5 HPQ Dec07 52.5 Calls @ $.55
12/10/07 Ex-Dividend Date -- $.08*500 shares
12/22/07 Dec07 Option Expiration Date – HPQ closed below the strike price at $52.03
12/26/07 Covered Calls Continuation Transaction -- STO 5 Jan08 52.5 Calls @ $1.20

The overall performance results(including commissions)for the HPQ transactions through Jan08 expiration would be as follows:
Stock Purchase Cost: $24,989.95
($49.96*500+$9.95 commission)

Net Profit:
(a) Options Income: $847.60 (500*$.55 + 500*1.20 - 2*13.70 commissions)
(b) Dividend Income: $40.00 ($.08*500)
(c) Capital Appreciation (If stock price unchanged from $52.03): +$1,015.10
= (52.03-49.96)*500 - 2*9.95 commissions
(c) Capital Appreciation (If exercised): +$1,250.10
= (52.50-49.96)*500 - 2*9.95 commissions

Total Net Profit(If stock price unchanged at $52.03): +$1,902.70
= ($847.60+$40.00+$1,015.10)
Total Net Profit(If stock price exercised at $52.50): +$2,137.70
= ($847.60+$40.00+$1,250.10)

Annualized Return If Unchanged (ARIU) +53.4% (+$1,902.70/$24,989.95)*(365/52)
Annualized Return If Exercised (ARIE) +60.0% (+$2,137.70/$24,989.95)*(365/52)


3. Kinetic Concepts Inc (KCI) Continuation Transaction

The following transaction was made today to continue the covered calls written against the 400 shares of KCI:
12/26/07 Covered Calls Continuation Transaction -- STO 4 Jan08 55 Calls @ $1.95

The Transactions History to date is as follows:

11/20/07 Initial Stock Position -- Bought 400 KCI @ 59.53
11/20/07 Initial Call Options -- Sold 4 KCI Dec07 60 Calls @ $2.35
12/22/07 Dec07 Option Expiration Date – KCI closed below the strike price at $54.25
12/26/07 Covered Calls Continuation Transaction -- STO 4 Jan08 55 Calls @ $1.95

The overall performance results(including commissions)for the KCI transactions through Jan08 expiration would be as follows:
Stock Purchase Cost: $23,821.95
($59.53*400+$9.95 commission)

Net Profit:
(a) Options Income: $1,694.10 (400*$2.35 + 400*1.95 - 2*12.95 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If stock price unchanged from $54.25): -$2,131.90
= (54.25-59.53)*400 - 2*9.95 commissions
(c) Capital Appreciation (If exercised): -$1,831.90
= (55.00-59.25)*400 - 2*9.95 commissions

Total Net Profit(If stock price unchanged at $54.25): -$437.80
= ($1,694.10+$0-$2,131.90)
Total Net Profit(If stock price exercised at $55): -$137.80
= ($1,694.10+$0-$1,831.90)

Annualized Return If Unchanged (ARIU) -11.2% (-437.80/$23,821.95)*(365/60)
Annualized Return If Exercised (ARIE) -3.5% (-137.80/$23,821.95)*(365/60)

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