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Saturday, August 16, 2008

August 2008 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of 12 positions with August 2008 expirations, with the following results:

(a) 7 positions (ACN,CSCO,EME,FRX,HPQ,JPM, and MSFT) closed in-the-money.
The calls were exercised and the stocks were called away. The transactions history for each of these positions is detailed below. The annualized percent return-on-investment(ROI) results were:
ACN +63.3%
CSCO +65.8%
EME +82.9%
FRX +67.6%
HPQ +48.6%
JPM +71.6%
MSFT -13.5%

(b) 1 position (HUM) was in-the-money and was rolled-up-and-out on expiration Friday yesterday. Yesterday's post on this blog details the status of this continuing covered calls position.

(c) 4 positions in the CCAP (DVN,HON,PBR, and TRV) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish Sep08 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.


Closing result details for each of the seven exercised positions are as follows:

1. Accenture Ltd. (ACN) -- Closed

Transactions History:
05/23/08 Initial Stock Purchase Transaction -- Bought 500 ACN @ $36.70
05/27/08 Initial Calls Sold Transaction -- Sold 5 ACN Jul08 $40 Calls @ $.80
07/19/08 July08 Options Expired
07/23/08 Covered Calls Continuation Transaction -- Sold 5 ACN Aug08 $40 Calls @ $1.40
08/16/08 Aug08 Options Exercised (Note: Closing price of ACN on 8/15/08 was $41.02)

The overall performance results(including commissions)for the ACN transactions was as follows:

Stock Purchase Cost: $18,358.95
($36.70*500+$8.95 commission)

Net Profit:
(a) Options Income: +$1,074.60 (500*($.80+$1.40) - 2*$12.70 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$1,632.10
= ($40.00-$36.70)*500 - 2*$8.95 commissions

Total Net Profit: +$2,706.70
= (+$1,074.60+$0+$1,632.10)

Annualized Return: +63.3%
(+$2,706.70/$18,358.95)*(365/85 days)


2. Cisco Systems,Inc. (CSCO) -- Closed

Transactions History:
07/22/08 Initial Stock Purchase Transaction: Bought 700 CSCO @ $21.66
07/22/08 Initial Calls Sold Transaction: Sold 7 CSCO Aug08 $22 Calls @ $.68
08/16/08 Aug08 Options Exercised (Note: Closing price of CSCO on 8/15/08 was $24.91)

The overall performance results(including commissions)for the CSCO transactions was as follows:

Stock Purchase Cost: $15,170.95
($21.66*700+$8.95 commission)

Net Profit:
(a) Options Income: +$463.30 (700*$.68 - $12.70 commission)
(b) Dividend Income: $0
(c) Capital Appreciation: +$220.10
= ($22.00-$21.66)*700 - 2*$8.95 commissions

Total Net Profit: +$683.40
= (+$463.30+$0+$220.10)

Annualized Return: +65.8%
(+$683.40/$15,170.95)*(365/25 days)


3. EMCOR Group (EME) -- Closed

Transactions History:
07/02/08 Initial Stock Purchase Transaction -- Bought 500 EME @ $26.64
07/02/08 Initial Calls Sold Transaction -- Sold 5 EME Jul08 $27.50 Calls @ $.70
07/19/08 July08 Options Expired
07/23/08 Covered Calls Continuation Transaction -- Sold 5 EME Aug08 $27.50 Calls @ $1.25
08/16/08 Aug08 Options Exercised (Note: Closing price of EME on 8/15/08 was $33.34)

The overall performance results(including commissions)for the EME transactions through the Aug08 expiration were as follows:

Stock Purchase Cost: $13,328.95
($26.64*500+$8.95 commission)

Net Profit:
(a) Options Income: +$949.60 (500*($.70+$1.25) - 2*$12.70 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$412.10
= ($27.50-$26.64)*500 - 2*$8.95 commissions

Total Net Profit: +$1,361.70
= (+$949.60+$0+$412.10)

Annualized Return: +82.9%
(+$1,361.70/$13,328.95)*(365/45 days)


4. Forest Laboratories (FRX) -- Closed

Transactions History:
06/26/08 Initial Stock Purchase Transaction: Bought 500 FRX @ $32.70
06/27/08 Initial Calls Sold Transaction: Sold 5 FRX Aug08 $35 Calls @ $.85
08/16/08 Aug08 Options Exercised (Note: Closing price of FRX on 8/15/08 was $38.71)

The overall performance results(including commissions)for the FRX transactions was as follows:

Stock Purchase Cost: $16,358.95
($32.70*500+$8.95 commission)

Net Profit:
(a) Options Income: +$412.30 (500*$.85 - $12.70 commission)
(b) Dividend Income: $0
(c) Capital Appreciation: +$1,132.10
= ($35.00-$32.70)*500 - 2*$8.95 commissions

Total Net Profit: +$1,544.40
= (+$1,132.10+$0+$412.30)

Annualized Return: +67.6%
(+$1,544.40/$16,358.95)*(365/51 days)


5. Hewlett-Packard Co. (HPQ) -- Closed

07/08/08 Initial Stock Purchase Transaction -- Bought 400 HPQ @ $43.74
07/08/08 Initial Calls Sold Transaction -- Sold 4 HPQ Jul08 $45.00 Calls @ $.50
07/19/08 July08 Options Expired
07/23/08 Covered Calls Continuation Transaction -- Sold 4 HPQ Aug08 $45.00 Calls
@ $.85
08/16/08 July08 Options Exercised (Note: Closing price of HPQ on 8/15/08 was $45.59)

The overall performance results(including commissions)for the HPQ transactions through the Aug08 expiration were as follows:

Stock Purchase Cost: $21,878.95
($43.74*400+$8.95 commission)

Net Profit:
(a) Options Income: +$649.60 (500*($.50+$.85) - 2*$12.70 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$486.10
= ($45.00-$43.74)*400 - 2*$8.95 commissions

Total Net Profit: +$1,135.70
= (+$649.60+$0+$486.10)

Annualized Return: +48.6%
(+$1,135.70/$21,878.95)*(365/39 days)


6. JPMorgan Chase & Co. (JPM) -- Closed

07/22/08 Initial Stock Purchase Transaction -- Bought 800 JPM @ $37.91
07/22/08 Initial Calls Sold Transaction -- Sold 8 JPM Aug08 $37.50 Calls @ $2.31
08/16/08 Aug08 Options Exercised (Note: Closing price of JPM on 8/15/08 was $38.07)

The overall performance results(including commissions)for the JPM transactions was as follows:

Stock Purchase Cost: $30,336.95
($37.91*800+$8.95 commission)

Net Profit:
(a) Options Income: +$1,833.05 (800*$2.31 - $14.95 commission)
(b) Dividend Income: $0
(c) Capital Appreciation: -$345.90
= ($37.50-$37.91)*800 - 2*$8.95 commissions

Total Net Profit: +$1,487.15
= (+$1,833.05+$0-$345.90)

Annualized Return: +71.6%
(+$1,487.15/$30,336.95)*(365/25 days)


7. Microsoft Corporation (MSFT) -- Closed

04/22/08 Initial Stock Purchase Transaction -- Bought 1000 MSFT @ $30.02
04/22/08 Initial Calls Sold Transaction -- Sold 10 MSFT May08 $31 Calls @ $.82
05/13/08 Ex-Dividend Date -- $.110 per share
05/17/08 May08 Options Expired
06/25/08 Covered Calls Continuation Transaction -- STO 10 Jul08 29 Calls @ $.60
07/19/08 July08 Options Expired
07/23/08 Covered Calls Continuation Transaction -- Sold 10 MSFT Aug08 $27.00 Calls
@ $.49
08/16/08 Aug08 Options Exercised (Note: Closing price of MSFT on 8/15/08 was $27.81)

The overall performance results(including commissions)for the MSFT transactions through the Aug08 expiration were as follows:

Stock Purchase Cost: $30,028.95
($30.02*1000+$8.95 commission)

Net Profit:
(a) Options Income: +$1,860.65 (1000*($.82+$.60+$.49 - 3*$16.45 commissions)
(b) Dividend Income: $110 (1000 shares * $.110)
(c) Capital Appreciation: -$3,037.90
= ($27.00-$30.02)*1000 - 2*$8.95 commissions

Total Net Profit: -$1,287.25
= (+$1,860.65+$110.00-$3,037.90)

Annualized Return: -13.5%
(-$1,287.25/$30,028.95)*(365/116 days)

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