Thursday, September 25, 2008

Continuation Transactions -- Altria, iShares MSCI China ETF, iShares MSCI South Korea ETF, Petrobras, and St Jude Medical

Today, covered calls positions were established against five equities 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. Altria(MO) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 500 shares owned in Altria(MO):
09/25/08 Covered Calls Continuation Transaction -- STO 5 Oct08 $21.00 Calls @ $.43

The Transactions History to date is as follows:
08/19/08 Initial Calls Sold Transaction -- Bought 500 MO @ $20.91
08/19/08 Initial Calls Sold Transaction -- Sold 5 MO Sep08 $21.00 Calls @ $.51
9/11/08 Ex-Dividend of $145.00 ($.29 * 500 shares)
09/20/08 Sep08 Options Expired
09/25/08 Covered Calls Continuation Transaction -- STO 5 Oct08 $21.00 Calls @ $.43

The overall performance results(including commissions) for the MO transactions through the Oct08 expiration would be as follows:
Stock Purchase Cost: $10,463.95
($20.91*500+$8.95 commission)

Net Profit:
(a) Options Income: +$444.60 (500*($.51+$.43) - 2*$12.70 commissions)
(b) Dividend Income: +$145.00 ($.29 per share*500 shares ex-div on 9/11/08)
(c) Capital Appreciation (If exercised): +$27.10
= ($21.00-$20.91)*500 - 2*$8.95 commissions

Total Net Profit(If stock price exercised at $21.00): +$616.70
= (+$444.60 +$145.00 +$27.10)

Annualized Return If Exercised (ARIE) +35.9%
(+$616.70/$10,463.95)*(365/60 days)


2. iShares MSCI China ETF(FXI) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 800 shares owned in iShares MSCI China ETF(FXI):
09/25/08 Covered Calls Continuation Transaction -- STO 8 Oct08 $40.0 Calls @ $1.10

The Transactions History to date is as follows:
08/18/08 Initial Calls Sold Transaction -- Bought 800 FXI @ $40.60
08/18/08 Initial Calls Sold Transaction -- Sold 8 FXI Sep08 $44.00 Calls @ $.60
09/20/08 Sep08 Options Expired
09/25/08 Covered Calls Continuation Transaction -- STO 8 Oct08 $40.00 Calls @ $1.10

The overall performance results(including commissions) for the FXI transactions through the Oct08 expiration would be as follows:
Stock Purchase Cost: $32,488.95
($40.60*800+$8.95 commission)

Net Profit:
(a) Options Income: +$1,330.10 (800*($.60 + $1.10) - 2*$14.95 commissions)
(b) Dividend Income: +$0
(c) Capital Appreciation (If exercised): -$497.90
= ($40.00-$40.60)*800 - 2*$8.95 commissions

Total Net Profit(If stock price exercised at $40.00): +$832.20
= (+$1,330.10 +$0.00 -$497.90)

Annualized Return If Exercised (ARIE) +15.3%
(+$832.20/$32,488.95)*(365/61 days)


3. iShares MSCI South Korea ETF(EWY) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 700 shares owned in iShares MSCI South Korea ETF(EWY):
09/25/08 Covered Calls Continuation Transaction -- STO 7 Oct08 $47.00 Calls @ $.65

The Transactions History to date is as follows:
08/18/08 Initial Stock Purchase Transaction -- Bought 700 EWY @ $48.35
08/18/08 Initial Calls Sold Transaction -- Sold 7 EWY Sep08 $50 Calls @ $1.05
09/20/08 Sep08 Options Expired
09/25/08 Covered Calls Continuation Transaction -- Sold 7 EWY Oct08 $47.00 Calls @
$.65

The overall performance results(including commissions) for the EWY transactions are as follows:
Stock Purchase Cost: $33,853.95
($48.35*700+$8.95 commission)

Net Profit:
(a) Options Income: +$1,161.60 (700*($1.05+$.65) - 2*$14.20 commissions)
(b) Dividend Income: +$0
(c) Capital Appreciation (If exercised): -$962.90
= ($47.00-$48.35)*700 - 2*$8.95 commissions

Total Net Profit(If stock price exercised at $47.00): +$198.70
= (+$1,161.60+$0-$962.90)

Annualized Return If Exercised (ARIE) +3.5%
(+$198.70/$33,853.95)*(365/61 days)


4. Petrobras(PBR) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 400 shares owned in Petrobras(PBR):
09/25/08 Covered Calls Continuation Transaction -- STO 4 Oct08 $47.50 Calls @ $2.70

The Transactions History to date is as follows:
07/07/08 Initial Stock Purchase Transaction -- Bought 400 PBR @ $65.95
07/07/08 Initial Calls Sold Transaction -- Sold 4 PBR Jul08 $65.00 Calls @ $2.95
07/19/08 July08 Options Expired
07/24/08 Covered Calls Continuation Transaction -- Sold 4 PBR Aug08 $60.00 Calls @ $1.00
Note: Price of PBR was $56.86 at the time when the calls were sold today.
08/16/08 Aug08 Options Expired
08/18/08 Covered Calls Continuation Transaction -- STO 4 Sep08 $55.00 Calls @ $.90
Note: Price of PBR was $49.45 when the calls were sold today.
09/20/08 Sep08 Options Expired
09/25/08 Covered Calls Continuation Transaction -- STO 4 Oct08 $47.50 Calls @ $2.70

The overall performance results(including commissions) for the PBR transactions are as follows:
Stock Purchase Cost: $26,388.95
($65.95*500+$8.95 commission)

Net Profit:
(a) Options Income: +$2,972.20 (400*($2.95+$1.00+$.90+$2.70) - 4*$11.95 commissions)
(b) Dividend Income: +$0
(c) Capital Appreciation (If exercised): -$7,397.90
= ($47.50-$65.95)*400 - 2*$8.95 commissions

Total Net Profit(If stock price exercised at $47.50): -$4,425.70
= (+$2,972.20+$0-$7,397.90)

Annualized Return If Exercised (ARIE) -59.4%
(-$4,425.70/$26,388.95)*(365/103 days)


5. St Jude Medical(STJ) Continuation Transaction

The following transaction was made today to establish a covered calls position against the 400 shares owned in St Jude Medical(STJ):
09/25/08 Covered Calls Continuation Transaction -- STO 4 Oct08 $45.00 Calls @ $1.60

The Transactions History to date is as follows:
08/18/08 Initial Stock Purchase Transaction -- Bought 400 STJ @ $46.36
08/18/08 Initial Calls Sold Transaction -- Sold 4 STJ Sep08 $45.00 Calls @ $2.40
09/20/08 Sep08 Options Expired
09/25/08 Covered Calls Continuation Transaction -- Sold 4 STJ Oct08 $45.00 Calls @ $1.60

The overall performance results(including commissions) for the STJ transactions are as follows:
Stock Purchase Cost: $18,552.95
($46.36*400+$8.95 commission)

Net Profit:
(a) Options Income: +$1,576.10 (400*($2.40+$1.60) - 2*$11.95 commissions)
(b) Dividend Income: +$0
(c) Capital Appreciation (If exercised): -$561.90
= ($45.00-$46.36)*400 - 2*$8.95 commissions

Total Net Profit(If stock price exercised at $45.00): +$1,014.20
= (+$1,576.10+$0-$561.90)

Annualized Return If Exercised (ARIE) +32.7%
(+$1,014.20/$18,552.95)*(365/61 days)

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