Monday, April 21, 2008

Boeing and Disney -- Continuation Transactions

1. Boeing (BA) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 200 shares of BA:
04/21/08 Covered Calls Transaction -- STO 2 May08 80 Calls @ $1.75

The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 200 BA @ $84.35
02/20/08 Initial Sold Calls Transaction -- Sold 2 BA Mar08 85 Calls @ $2.40
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 2 Apr08 80 Calls @ $.85
Note: The price of BA was $75.40 when calls were written on 3/24/08.
04/19/08 Apr08 Options Expired
04/21/08 Covered Calls Continuation Transaction -- Sold 2 May08 80 Calls @ $1.75
Note: The price of BA was $78.90 when the calls were written on 4/21/08.

The overall performance results(including commissions)for the BA transactions through the May08 expiration would be as follows:
Stock Purchase Cost: $16,879.95
($84.35*200+$9.95 commission)

Net Profit:
(a) Options Income:+$965.65 (200*$2.40+ 200*$.85+ 200*$1.75- 3*$11.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If stock price unchanged from $78.90): -$1,109.90
= ($78.90-$84.35)*200 - 2*$9.95 commissions
(c) Capital Appreciation (If exercised): -$889.90
= ($80.00-$84.35)*200 - 2*$9.95 commissions

Total Net Profit(If stock price unchanged at $78.90): -$144.25
= ($965.65+$0-$1,109.90)
Total Net Profit(If stock price exercised at $80.00): +$75.75
= ($965.65 +$0 -$889.90)


Annualized Return If Unchanged (ARIU) -3.6%
(-$144.25/$16,879.95)*(365/87 days)
Annualized Return If Exercised (ARIE) +1.9%
(+$75.75/$16,879.95)*(365/87 days)


2. Disney (DIS) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 600 shares of DIS:
04/21/08 Covered Calls Transaction -- STO 6 May08 32.5 Calls @ $.50

The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 600 DIS @ $32.09
02/20/08 Initial Calls Sold Transaction -- Sold 6 DIS Mar08 32.5 Calls @ $.80
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 6 Apr08 32.5 Calls @ $.65
Note: The price of DIS was $31.85 when the calls were written on 3/24/08.
04/19/08 Apr08 Options Expired
04/21/08 Covered Calls Continuation Transaction -- Sold 2 May08 32.5 Calls @ $.50
Note: The price of DIS was $31.35 when the calls were written on 4/21/08.


The overall performance results(including commissions)for the DIS transactions through the May08 expiration would be as follows:
Stock Purchase Cost: $19,263.95
($32.09*600+$9.95 commission)

Net Profit:
(a) Options Income: +$1,126.65 (600*$.80 +600*$.65 +600*$.50 - 3*$14.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If stock price unchanged from $31.35): -$424.10
= ($31.35-$32.09)*600 - 2*$9.95 commissions
(c) Capital Appreciation (If exercised): +$226.10
= ($32.50-$32.09)*600 - 2*$9.95 commissions

Total Net Profit(If stock price unchanged at $31.35): +$702.55
= ($1,126.65 + $0 -$424.10)
Total Net Profit(If stock price exercised at $32.50): +$1,352.75
= ($1,126.65 + $0 +$226.10)


Annualized Return If Unchanged (ARIU) +22.6%
(+$702.55/$19,263.95)*(365/59 days)
Annualized Return If Exercised (ARIE) +43.4%
(+$1,352.75/$19,263.95)*(365/59 days)

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