Wednesday, February 20, 2008

iShares MSCI South Korea Index ETF -- Continuation Transaction

The following transaction was made yesterday to establish a covered calls position against the 800 shares of EWY:
02/19/08 Covered Calls Continuation Transaction -- STO 8 Mar08 63 Calls @ $.80

The Transactions History to date is as follows:
11/28/07 Bought 800 EWY @ $65.22
11/28/07 Sold 8 EWY Dec07 68 Calls @ $1.75
12/15/07 Dec07 Options Expiration Date – EWY closed below the strike price
12/24/07 Ex-Dividend Date $.369 * 800 shares
01/25/08 Covered Calls Continuation Transaction -- STO 8 Feb08 62 Calls @ $1.00
02/16/08 Feb08 Expiration Date -- EWY closed below the strike price
02/19/08 Covered Calls Continuation Transaction -- STO 8 Mar08 63 Calls @ $.80

The overall performance results(including commissions)for the EWY transactions through the Mar08 expiration would be as follows:
Stock Purchase Cost: $52,185.95
($65.22*800+$9.95 commission)

Net Profit:
(a) Options Income: +$2,792.15 [800*($1.75+$1.00+$.80) - 3*$15.95 commissions]
(b) Dividend Income: +$295.20 (800*$.369)
(c) Capital Appreciation (If stock price unchanged from $58.54): -$5,363.90
= ($58.54-$65.22)*800 - 2*$9.95 commissions
(c) Capital Appreciation (If exercised): -$1,795.90
= ($63.00-$65.22)*800 - 2*$9.95 commissions

Total Net Profit(If stock price unchanged at $58.54): -$2,276.55
= (+$2,792.15 +$295.20 -$5,363.90)
Total Net Profit(If stock price exercised at $63.00): +1,291.45
= (+$2,792.15 +$295.20 -$1,795.90)


Annualized Return If Unchanged (ARIU) -13.8%
(-$2,276.55/$52,185.95)*(365/115)
Annualized Return If Exercised (ARIE) +7.9%
(+$1,291.45/$52,185.95)*(365/115)

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