Monday, August 18, 2008

Devon Energy and Travelers Cos. -- Closed

Two Aug08 covered calls positions that expired with the stock prices out-of-the-money were closed out today by selling the stock. It was decided to sell these two stocks rather than rolling-out to Sep08 covered calls to raise cash in order to enable improved portfolio diversification by replacing them with covered calls positions in international ETFs. The detailed results for the completed positions in Devon Energy and Travelers Cos Inc. are as follows:

1. Devon Energy (DVN) -- Closed

The position in Devon Energy (DVN) was closed today by selling the 200 shares owned.

The Transactions History to date is as follows:
07/24/08 Initial Stock Purchase Transaction -- Bought 200 DVN @ $94.45
07/24/08 Initial Calls Sold Transaction -- Sold 2 DVN Aug08 $105.00 Calls @ $2.30
08/16/08 Aug08 Options Expired
08/18/08 Sold 200 DVN at $96.00

The overall performance results(including commissions) for the DVN transactions are as follows:
Stock Purchase Cost: $18,881.05
($94.45*200-$8.95 commission)

Net Profit:
(a) Options Income: +$449.55 (200*$2.30 - $10.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$292.10
= ($96.00-$94.45)*200 - 2*$8.95 commissions

Total Net Profit: +$741.65
= ($449.55 + $0 + $292.10)

Annualized Return: +57.3%
(+$741.65/$18,881.05)*(365/25 days)


2. Travelers Cos. Inc. (TRV) -- Closed

The position in Travelers Cos Inc (TRV) was closed today by selling the 500 shares owned.

The Transactions History to date is as follows:
05/22/08 Initial Stock Purchase Transaction -- Bought 500 TRV @ $49.28
06/05/08 Initial Calls Sold Transaction -- Sold 5 TRV Jun08 $50 Calls @ $.85
06/08/08 Ex-Dividend Date ($.30 per share)
06/20/08 Jun08 Options Expired
07/10/08 Covered Calls Continuation Transaction -- Sold 5 Jul08 $45.00 Calls @ $.80
Note: Price of TRV was $44.50 when the calls were sold today.
08/16/08 Aug08 Options Expired
08/18/08 Sold 500 TRV at $44.16

The overall performance results(including commissions) for the TRV transactions are as follows:
Stock Purchase Cost: $24,648.95
($49.28*500+$8.95 commission)

Net Profit:
(a) Options Income: +$797.60 (500*($.85+$.80) - 2*$13.70 commissions)
(b) Dividend Income: $150 ($.30 x 500 shares)
(c) Capital Appreciation: -$2,577.90
= ($44.16-$49.28)*500 - 2*$8.95 commissions

Total Net Profit: -$1,630.30
= (+$797.60 + $150 - $2,577.90)

Annualized Return: -27.4%
(-$1,63.30/$24,648.95)*(365/88 days)

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