Sunday, September 21, 2008

September 2008 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of 13 positions with September 2008 expirations, with the following results:
- 2 positions (HPQ & STI) 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 was:

Hewlett-Packard Co. +53.5%
SunTrust Banks Inc. +133.0%

- 11 positions in the CCAP (ACN,MO,HON,HUM,FXI,EWY,EWT,MSFT,PBR,SPR, and STJ) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish Oct08 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 exercised positions in Hewlett Packard and SunTrust Banks Inc was as follows:

1. Hewlett Packard -- Closed

Transactions History:
08/18/08 Initial Stock Purchase Transaction -- Bought 200 HPQ @ $44.34
08/08/08 Initial Calls Sold Transaction -- Sold 2 HPQ Sep08 $45.00 Calls @ $1.55
09/08/08 Ex-Div of $16.00($.08 * 200 shares)
09/20/08 Sep08 Options Exercised (Note: Closing price on Friday 9/19/08 was $48.26)

The overall performance results(including commissions)for the HPQ transactions through the Sep08 expiration were as follows:
Stock Purchase Cost: $8,876.95
($44.34*200+$8.95 commission)

Net Profit:
(a) Options Income: +$299.55 (200*$1.55 - $10.45 commissions)
(b) Dividend Income: +$16.00
(c) Capital Appreciation: +$114.10
= ($45.00-$44.34)*200 - 2*$8.95 commissions

Total Net Profit: +$429.65
= ($299.55+$16.00+$114.10)

HPQ Annualized Return on Investment: +53.5%
(+$429.65/$8,876.95)*(365/33 days)

2. SunTrust Banks Inc -- Closed

Transactions History:
08/19/08 Initial Stock Purchase Transaction -- Bought 300 STI @ $39.91
08/19/08 Initial Calls Sold Transaction -- Sold 3 STI Sep08 $40.00 Calls @ $2.70
08/28/08 Ex-dividend of $231.00 ($.77 * 300 shares)
09/05/08 Roll-Up Transaction (executed as a Debit Spread):
Bought to close 3 STI Sep08 $40.00 Calls @ $6.11
Sold to open 3 STI Sep08 $45.00 Calls @ $2.41
09/20/08 Sep08 Options Exercised (Note: Closing price on Friday 9/19/08 was $59.20)

The overall performance results(including commissions)for the STI transactions through the Sep08 expiration were as follows:
Stock Purchase Cost: $12,062.50
($39.91*300+$8.95 commission)

Net Profit:
(a) Options Income: -$333.60 (300*($2.70-$6.11+$2.41) - $33.60 commissions)
(b) Dividend Income: +$231.00 ($.77 * 300 shares)
(c) Capital Appreciation: +$1,509.10
= ($45.00-$39.91)*300 - 2*$8.95 commissions

Total Net Profit: +$1,406.50
= (-$333.60+$231.00+$1,509.10)

STI Annualized Return on Investment: +133.0%
(+$1,406.50/$12,062.50)*(365/32 days)

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