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Friday, September 26, 2008

Continuation Transactions -- Accenture and Microsoft

Today, covered calls positions were established against two companies already owned in the Covered Calls Advisor Portfolio(CCAP). As shown by the transactions history below, the Sep08 options expired worthless and new options were sold today to roll-out to Oct08 covered call positions.


1. Accenture(ACN) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 300 shares owned in Accenture(ACN):
09/26/08 Covered Calls Continuation Transaction -- STO 3 Oct08 $40.00 Calls @ $.70

The Transactions History to date is as follows:
08/18/08 Initial Stock Purchase Transaction -- Bought 300 ACN @ $41.01
08/18/08 Initial Calls Sold Transaction -- Sold 3 ACN Sep08 $40.00 Calls @ $1.90
09/20/08 Sep08 Options Expired
09/26/08 Covered Calls Continuation Transaction -- STO 3 Oct08 $40.00 Calls @ $.70

The overall performance results(including commissions) for the ACN transactions through the Oct08 expiration would be as follows:
Stock Purchase Cost: $12,311.95
($41.01*300+$8.95 commission)

Net Profit:
(a) Options Income: +$757.60 (300*($1.90+$.70) - 2*$11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation (If exercised): -$320.90
= ($40.00-$41.01)*300 - 2*$8.95 commissions

Total Net Profit(If stock price exercised at $40.00): +$436.70
= (+$757.60 +$0-$320.90)

Annualized Return If Exercised (ARIE) +21.2%
(+$436.70/$12,311.95)*(365/61 days)


2. Microsoft(MSFT) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 300 shares owned in Microsoft(MSFT):
09/26/08 Covered Calls Continuation Transaction -- STO 5 Oct08 $28.00 Calls @ $.55

The Transactions History to date is as follows:
08/18/08 Bought 500 MSFT @ $27.95
08/18/08 Sold 5 MSFT Sep08 $28.00 Calls @ $.81
09/20/08 Sep08 Options Expired
09/26/08 Covered Calls Continuation Transaction -- STO 5 Oct08 $28.00 Calls @ $.55

The overall performance results(including commissions) for the MSFT transactions are as follows:
Stock Purchase Cost: $13,983.95
($27.95*500+$8.95 commission)

Net Profit:
(a) Options Income: +$654.60 (500*($.81+$.55) - 2*$12.70 commissions)
(b) Dividend Income: +$0
(c) Capital Appreciation (If exercised): +$7.10
= ($28.00-$27.95)*500 - 2*$8.95 commissions

Total Net Profit(If stock price exercised at $28.00): +$661.70
= (+$654.60+$0+$7.10)

Annualized Return If Exercised (ARIE) +28.3%
(+$661.70/$13,983.95)*(365/61 days)

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