Tuesday, May 20, 2008

May 2008 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of 10 positions with May 2008 expirations, with the following results:
- 6 positions (BK,BA,DIS,EEM,MDR,NOK) 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:

Bank of New York Mellon +47.3%
Boeing +1.9%
Disney +43.4%
iShares MSCI Emerging Markets ETF +30.4%
McDermott International +98.8%
Nokia +83.3%

- 4 positions in the CCAP (AUO,CTB,HUM, and MSFT) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish Jun08 covered call positions. The related transactions will be made during the next few days and the actual transactions will be posted on this blog site on the same day they occur.

Details for the six exercised positions were as follows:

1. Bank of New York Mellon -- Closed

Transactions History:
04/22/08 Initial Stock Purchase Transaction -- Bought 500 BK @ $40.67
04/22/08 Initial Calls Sold Transaction -- Sold 5 BK May08 40 Calls @ $2.05
05/17/08 Options Exercised -- STC 500 BK @ $40.00
[Note: BK stock closed on expiration Friday (5/16/08) at $45.55)]

The overall performance results(including commissions)for the BK transactions through the May08 expiration were as follows:
Stock Purchase Cost: $20,343.95
($40.67*500+$8.95 commission)

Net Profit:
(a) Options Income: $1,012.30 (500*$2.05 - $12.70 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation: -$352.90
= ($40.00-$40.67)*500 - 2*$8.95 commissions

Total Net Profit: +$659.40
= ($1,012.30+$0.00-$352.90)

BK Annualized Return on Investment: +47.3%
(+$659.40/$20,343.95)*(365/25 days)

2. Boeing -- Closed

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.
05/17/08 Options Exercised -- STC 200 BA @ $80.00
[Note: BA stock closed on expiration Friday (5/16/08) at $85.17)]

The overall performance results(including commissions)for the BA transactions through the May08 expiration are 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: -$889.90
= ($80.00-$84.35)*200 - 2*$9.95 commissions

Total Net Profit: +$75.75
= ($965.65 +$0 -$889.90)


BA Annualized Return on Investment: +1.9%
(+$75.75/$16,879.95)*(365/87 days)


3. Disney -- Closed

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 6 May08 32.5 Calls @ $.50
Note: The price of DIS was $31.35 when the calls were written on 4/21/08.
05/17/08 Options Exercised -- STC 600 DIS @ $32.50
[Note: DIS stock closed on expiration Friday (5/16/08) at $34.91)]

The overall performance results(including commissions)for the DIS transactions through the May08 expiration are 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: +$226.10
= ($32.50-$32.09)*600 - 2*$9.95 commissions

Total Net Profit: +$1,352.75
= ($1,126.65 + $0 +$226.10)


DIS Annualized Return on Investment: +43.4%
(+$1,352.75/$19,263.95)*(365/59 days)


4. iShares MSCI Emerging Markets ETF
04/28/08 Bought 100 EEM @ $145.30
04/28/08 Sold 1 EEM May08 $140 Call @ $7.90

Transactions History:
04/28/08 Initial Stock Purchase Transaction -- Bought 100 EEM @ $145.30
04/22/08 Initial Calls Sold Transaction -- Sold 1 EEM May08 $140 Calls @ $7.90
05/17/08 Options Exercised -- STC 100 EEM @ $140.00
[Note: EEM ETF closed on expiration Friday (5/16/08) at $155.10)]

The overall performance results(including commissions)for the EEM transactions through the May08 expiration were as follows:
Stock Purchase Cost: $14,538.95
($145.30*100+$8.95 commission)

Net Profit:
(a) Options Income: $780.30 (100*$7.90 - $9.70 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation: -$547.90
= ($140.00-$145.30)*100 - 2*$8.95 commissions

Total Net Profit: +$230.40
= ($780.30+$0.00-$547.90)

EEM Annualized Return on Investment: +30.4%
(+$230.40/$14,538.95)*(365/19 days)


5. McDermott International -- Closed

Transactions History:
04/28/08 Initial Stock Purchase Transaction -- Bought 300 MDR @ $59.16
04/28/08 Initial Calls Sold Transaction -- Sold 3 MDR May08 60 Calls @ $2.30
05/17/08 Options Exercised -- STC 300 MDR @ $60.00
[Note: MDR stock closed on expiration Friday (5/16/08) at $60.36)]

The overall performance results(including commissions)for the MDR transactions through the May08 expiration were as follows:
Stock Purchase Cost: $17,756.95
($59.16*300+$8.95 commission)

Net Profit:
(a) Options Income: $678.80 (300*$2.30 - $11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation: +$234.10
= ($60.00-$59.16)*300 - 2*$8.95 commissions

Total Net Profit: +$912.90
= ($678.80+$0.00+$234.10)

MDR Annualized Return on Investment: +98.8%
(+$912.90/$17,756.95)*(365/19 days)


6. Nokia -- Closed

Transactions History:
04/21/08 Initial Stock Purchase Transaction -- Bought 1000 NOK @ $29.07
04/21/08 Initial Calls Sold Transaction -- Sold 10 NOK May08 29 Calls @ $1.05
05/09/08 Ex-Dividend Date $.7802 * 1000 shares = $780.20 dividend income
05/17/08 Options Exercised -- STC 1000 BK @ $29.00
[Note: NOK stock closed on expiration Friday (5/16/08) at $29.17)]

The overall performance results(including commissions)for the NOK transactions through the May08 expiration were as follows:
Stock Purchase Cost: $29,078.95
($29.07*1000+$8.95 commission)

Net Profit:
(a) Options Income: $1,033.55 (1000*$1.05 - $16.45 commissions)
(b) Dividend Income: $780.20 (1000 * $.7802)
(c) Capital Appreciation: -$87.90
= ($29.00-$29.07)*1000 - 2*$8.95 commissions

Total Net Profit: +$1,725.85
= ($1,033.55+$780.20-$87.90)

NOK Annualized Return on Investment: +83.3%
(+$1,725.85/$29,078.95)*(365/26 days)

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