Saturday, April 19, 2008

April 2008 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of 11 positions with April 2008 expirations, with the following results:
- 5 positions (CE,CB,EWY,MSFT, and VZ) closed in-the-money. The calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results for these positions were:

Celanese +46.0%
Chubb +50.4%
iShares MSCI South Korea Index ETF -11.5%
Microsoft +72.2%
Verizon +48.9%

- 6 positions in the CCAP (BA,DIS,FTO,HUM,MYL, and STX) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish May08 covered call positions. The related transactions will be made during the upcoming week and the actual transactions will be posted on this blog site on the same day they occur.

Details for the five exercised positions were as follows:

1. Celanese -- Closed
A covered calls position in CE was established in the CCAP on 02/22/08. The initial covered calls position expired with the stock out-of-the-money (Note: Price of CE was $38.90 at Mar08 expiration) and a continuation transaction was established on 3/24/08. The stock closed in-the-money yesterday:

Transactions History:
02/22/08 Initial Stock Purchase Transaction -- Bought 300 CE @ $40.62
02/22/08 Initial Calls Sold Transaction -- Sold 3 CE Mar08 40 Calls @ $1.95
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 3 Apr08 40 Calls @ $1.70
04/11/08 Ex-Dividend $.04 per share
04/19/08 Options Exercised -- STC 300 CE @ $40.00
[Note: CE stock closed on expiration Friday (4/18/08) at $43.55)]

The overall performance results(including commissions)for the CE transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $12,195.95
($40.62*300+$9.95 commission)

Net Profit:
(a) Options Income: $1,070.60 (300*$1.95 + 300*$1.70 - 2*$12.20 commissions)
(b) Dividend Income: $12.00 (300 * $.04)
(c) Capital Appreciation: -$205.90
= ($40.00-$40.62)*300 - 2*$9.95 commissions

Total Net Profit: +$876.70
= ($1,070.60+$12.00-$205.90)

CE Annualized Return on Investment: +46.0%
(+$876.70/$12,195.95)*(365/57 days)


2. Chubb -- Closed

03/27/08 Initial Stock Purchase Transaction -- Bought 500 CB @ $49.87
03/27/08 Initial Calls Sold Transaction -- Sold 5 CB Apr08 $50 Calls @ $1.55
04/19/08 Options Exercised -- STC 500 CB @ $50.00
[Note: CB stock closed on expiration Friday (4/18/08) at $51.90)]

The overall performance results(including commissions)for the CE transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $24,944.95
($49.87*500+$9.95 commission)

Net Profit:
(a) Options Income: +$747.60 (500*$1.55 - 2*$13.70 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$45.10
= ($50.00-$49.87)*500 - 2*$9.95 commissions

Total Net Profit: +$792.70
= ($747.60+$0+$45.10)

CB Annualized Return on Investment: +50.4%
(+$792.70/$24,944.95)*(365/23 days)


3. iShares MSCI South Korea Index ETF (EWY) -- Closed

The Transactions History to date is as follows:

11/28/07 Initial Stock Purchase Transaction -- Bought 800 EWY @ $65.22
11/28/07 Initial Calls Sold Transaction -- 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
03/22/08 Mar08 Expiration Date -- EWY closed below the strike price
3/24/08 Ex-Dividend Date $.369 * 800 shares
3/24/08 Covered Calls Continuation Transaction -- STO 8 Apr08 57 Calls @ $1.10
Note: Price of EWY was $54.75 when the calls were sold today.
04/19/08 Options Exercised -- STC 800 EWY @ $57.00
[Note: EWY closed on expiration Friday (4/18/08) at $58.59)]

The overall performance results(including commissions)for the EWY transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $52,185.95
($65.22*800+$9.95 commission)

Net Profit:
(a) Options Income: +$3,656.20 [800*($1.75+$1.00+$.80+$1.10) - 4*$15.95 commissions]
(b) Dividend Income: +$590.40 (800*$.369+ 800*$.369)
(c) Capital Appreciation: -$6,595.90
= ($57.00-$65.22)*800 - 2*$9.95 commissions

Total Net Profit: -$2,349.30
= (+$3,656.20 +$590.40 -$6,595.90)

EWY Annualized Return on Investment: -11.5%
(-$2,349.30/$52,185.95)*(365/143 days)


4. Microsoft -- Closed
An APR08 covered calls position in MSFT was established in the CCAP on 03/31/08. The stock closed in-the-money at expiration yesterday and the stock was called away:

03/31/08 Initial Stock Purchase Transaction -- Bought 1000 MSFT @ $28.54
03/27/08 Initial Calls Sold Transaction -- Sold 10 MSFT Apr08 $29 Calls @ $.65
04/19/08 Options Exercised -- STC 1000 MSFT @ $29.00
[Note: MSFT stock closed on expiration Friday (4/18/08) at $30.00)]

The overall performance results(including commissions)for the MSFT transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $28,549.95
($28.54*1000+$9.95 commission)

Net Profit:
(a) Options Income: +$632.55 (1000*$.65 - $17.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$440.10
= ($29.00-$28.54)*1000 - 2*$9.95 commissions

Total Net Profit: +$1,072.65
= (+632.55+$0+$440.10)

MSFT Annualized Return on Investment: +72.2%
(+$1,072.65/$28,549.95)*(365/19 days)


5. Verizon -- Closed
An APR08 covered calls position in VZ was established in the CCAP on 02/20/08. The stock closed in-the-money at expiration yesterday and the stock was called away:

02/20/08 Initial Stock Purchase Transaction -- Bought 300 VZ @ $33.94
02/20/08 Initial Calls Sold Transaction -- Sold 3 VZ Apr08 35 Calls @ $1.30
04/11/08 Ex-Dividend $.43 per share
04/19/08 Options Exercised -- STC 300 VZ @ $35.00
[Note: VZ stock closed on expiration Friday (4/18/08) at $36.03)]

The overall performance results(including commissions)for the VZ transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $10,191.95
($33.94*300+$9.95 commission)

Net Profit:
(a) Options Income: +$377.80 (300*$1.30 - $12.20 commissions)
(b) Dividend Income: +$129.00 (300*$.43)
(c) Capital Appreciation: +$298.10
= ($35.00-$33.94)*300 - 2*$9.95 commissions

Total Net Profit: +$804.90
= (+$377.80+$129.00+$298.10)

VZ Annualized Return on Investment: +48.9%
(+$804.90/$10,191.95)*(365/59 days)

1 comment:

  1. Your blog continues to be amazing. I'm wondering whether you would have done better in cash while the market was falling in the first part of the year? I've been out of covered calls since early Jan. and, like you, feel the market outlook is mixed to neutral. As long as I don't feel real bearish, I will try a few ccs.

    ReplyDelete