Saturday, December 20, 2008

December 2008 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of 12 positions with December 2008 expirations, with the following results:
- 9 positions (ACN,AOB,APC,HPQ,FXI,EWY,MCK,PBR & POT) 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:

Accenture Ltd -38.7%
American Oriental Bioengineering Inc +133.0%
Anadarko Petroleum Corp +115.0%
Hewlett-Packard Co. +92.1%
iShares MSCI China ETF -66.0%
iShares MSCI South Korea ETF -120.8%
McKesson Corp +133.7%
Petroleo Brasileiro -80.1%
Potash Corp of Saskatchewan Inc +201.4%

- 3 positions in the CCAP (MO,GU, and MSFT) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish Jan09 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 each of the exercised positions are as follows:

1. Accenture Ltd. -- Closed
The Transactions History was 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
10/08/08 $126.00 Ex-Dividend Income ($.42*300 shares)
10/18/08 Oct08 Options Expired
10/28/08 Covered Calls Continuation Transaction -- STO 3 ACN Nov08 $35.00 Calls at $.75
11/22/08 Nov08 Options Expired
11/24/08 Covered Calls Continuation Transaction -- STO 3 ACN Dec08 $30 Calls at $2.05
12/20/08 Dec08 Options Exercised -- 300 shares ACN called away
Note: Closing price of ACN was $32.21 on expiration Friday

The overall performance results(including commissions) for the ACN transactions through the Dec08 expiration were as follows:
Stock Purchase Cost: $12,311.95
($41.01*300+$8.95 commission)

Net Profit:
(a) Options Income: +$1,575.20 (300*($1.90+$.70+$.75+$2.05) - 4*$11.20 commissions)
(b) Dividend Income: +$126.00
(c) Capital Appreciation: -$3,320.90
= ($30.00-$41.01)*300 - 2*$8.95 commissions

Total Net Profit: -$1,619.70
= (+$1,575.20 +$126.00 -$3,320.90)

ACN Annualized Return on Investment -38.7%
(-$1,619.70/$12,311.95)*(365/124 days)


2. American Oriental Bioengineering Inc -- Closed

Transactions History:
Established American Oriental Bioengineering Inc (AOB) Covered Calls for Dec08:
11/24/08 Initial Stock Purchase Transaction -- Bought 1500 AOB @ $4.91
11/24/08 Initial Calls Sold Transaction -- Sold 15 AOB Dec08 $5.00 Calls @ $.40
12/20/08 Dec08 Options Exercised -- 1500 shares AOB called away
Note: Closing price of AOB was $6.30 on expiration Friday

The overall performance results(including commissions) for the AOB transactions through the Dec08 expiration was as follows:
Stock Purchase Cost: $7,356.05
($4.91*1500+$8.95 commission)

Net Profit:
(a) Options Income: +$579.80 (1500*$.40 - $20.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: +$117.10
= ($5.00-$4.91)*1500 - 2*$8.95 commissions

Total Net Profit: +$696.90
= (+$579.80 +$0.00 +$117.10)

AOB Annualized Return on Investment +133.0%
(+$696.90/$7,356.05)*(365/26 days)


3. Anadarko Petroleum Corp -- Closed
11/24/08 Initial Stock Purchase Transaction -- Bought 500 APC @ $35.62
11/24/08 Initial Calls Sold Transaction -- Sold 5 APC Dec08 $35.00 Calls @ $3.60
12/20/08 Dec08 Options Exercised -- 500 shares APC called away
Note: Closing price of APC was $37.16 on expiration Friday

The overall performance results(including commissions)for the APC transaction through the Sep08 expiration was as follows:
Stock Purchase Cost: $17,818.95
($35.62*500+$8.95 commission)

Net Profit:
(a) Options Income: +$1,787.30 (500*$3.60 - $12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$327.90
= ($35.00-$35.62)*500 - 2*$8.95 commissions

Total Net Profit: +$1,459.40
= (+$1,787.30+$0.00-$327.90)

APC Annualized Return on Investment: +115.0%
(+$1,459.40/$17,818.95)*(365/26 days)


4. Hewlett-Packard Co -- Closed
11/24/08 Initial Stock Purchase Transaction -- Bought 500 HPQ @ $35.18
11/24/08 Initial Calls Sold Transaction -- Sold 5 HPQ Dec08 $35.00 Calls @ $2.55
12/20/08 Dec08 Options Exercised -- 500 shares HPQ called away
Note: Closing price of HPQ was $35.40 on expiration Friday

The overall performance results(including commissions)for the HPQ transaction through the Dec08 expiration was as follows:
Stock Purchase Cost: $17,598.95
($35.18*500+$8.95 commission)

Net Profit:
(a) Options Income: +$1,262.30 (500*$2.55 - $12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$107.90
= ($35.00-$35.18)*500 - 2*$8.95 commissions

Total Net Profit: +$1,154.40
= (+$1,262.30+$0.00-$107.90)

HPQ Annualized Return on Investment: +92.1%
(+$1,154.40/$17,598.95)*(365/26 days)

5. iShares MSCI China ETF -- Closed
Transactions History:
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
10/18/08 Oct08 Options Expired
10/20/08 Covered Calls Continuation Transaction -- STO 8 Nov08 $34.00 Calls @ $1.30
11/22/08 Nov08 Options Expired
11/24/08 Covered Calls Continuation Transaction -- Sold 8 FXI Dec08 $27 Calls at $1.55
12/20/08 Dec08 Options Exercised -- 800 shares FXI called away
Note: Closing price of FXI was $30.55 on expiration Friday

The overall performance results(including commissions) for the FXI transactions through the Dec08 expiration were as follows:
Stock Purchase Cost: $32,488.95
($40.60*800+$8.95 commission)

Net Profit:
(a) Options Income: +$3,610.10 (800*($.60 + $1.10 + $1.30 + $1.55) - 2*$14.95 commissions)
(b) Dividend Income: +$0
(c) Capital Appreciation: -$10,897.90
= ($27.00-$40.60)*800 - 2*$8.95 commissions

Total Net Profit: -$7,287.80
= (+$3,610.10 +$0.00 -$10,897.90)

FXI Annualized Return on Investment -66.0%
(-$7,287.80/$32,488.95)*(365/124 days)

6. iShares MSCI South Korea ETF(EWY) -- Closed

The Transactions History was 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
10/18/08 Oct08 Options Expired
10/20/08 Covered Calls Continuation Transaction -- STO 7 Nov08 $30.00 Calls @ $2.30
11/22/08 Nov08 Options Expired
11/24/08 Covered Calls Continuation Transaction -- Sold 7 EWY Dec08 $24 Calls at $1.25
12/20/08 Dec08 Options Exercised -- 700 shares EWY called away
Note: Closing price of EWY was $29.05 on expiration Friday

The overall performance results(including commissions) for the EWY transactions through the Dec08 expiration were as follows:
Stock Purchase Cost: $33,853.95
($48.35*700+$8.95 commission)

Net Profit:
(a) Options Income: +$3,618.20 (700*($1.05+$.65+$2.30+$1.25) - 4*$14.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$17,062.90
= ($24.00-$48.35)*700 - 2*$8.95 commissions

Total Net Profit: -$13,894.70
= (+$3,618.20 +$0.00 -$17,062.90)

EWY Annualized Return on Investment -120.8%
(-$13,894.70/$33,853.95)*(365/124 days)


7. McKesson Corporation -- Closed

The Transactions History was as follows:
11/24/08 Initial Stock Purchase -- Bought 300 MCK @ $30.72
11/24/08 Initial Call Option Transaction -- Sold 3 MCK Dec08 $30.00 Calls @ $2.35
11/26/08 $36.00 Ex-Dividend Income ($.12 per share X 300 shares)
11/28/08 Roll Up Transaction -- BTC 3 MCK Dec 30s @ $5.28
11/28/08 Roll Up Transaction -- STO 3 MCK Dec 35s @ $1.63
Note: MCK was trading at $34.88 today when the roll up transaction was executed.
12/20/08 Dec08 Options Exercised -- 300 shares MCK called away
Note: Closing price of MCK was $37.89 on expiration Friday

The overall performance results(including commissions) for the MCK transactions through the Dec08 expiration was as follows:
Stock Purchase Cost: $9,224.95
($30.72*300+$8.95 commission)

Net Profit:
(a) Options Income: -$423.60 (300*($2.35-$5.28+$1.63) - 3*$11.20 commissions)
(b) Dividend Income: +$36.00 (300*$.12/share)
(c) Capital Appreciation: +$1,266.10
= ($35.00-$30.72)*300 - 2*$8.95 commissions

Total Net Profit: +$878.50
= (-$423.60 +$36.00 +$1,266.10)

MCK Annualized Return on Investment +133.7%
(+$878.50/$9,224.95)*(365/26 days)


8. Petroleo Brasileiro(Petrobras) -- Closed

The Transactions History was 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
10/18/08 Oct08 Options Expired
10/20/08 Covered Calls Continuation Transaction -- STO 4 Nov08 $30.00 Calls @ $2.30
11/22/08 Nov08 Options Expired
11/24/08 Covered Calls Continuation Transaction -- Sold 4 Dec08 Dec08 $20 Calls at $2.15
12/20/08 Dec08 Options Exercised -- 400 shares PBR called away
Note: Closing price of PBR was $23.40 on expiration Friday

The overall performance results(including commissions) for the PBR transactions through the Dec08 expiration were as follows:
Stock Purchase Cost: $26,388.95
($65.95*400+$8.95 commission)

Net Profit:
(a) Options Income: +$4,728.30 (400*($2.95+$1.00+$.90+$2.70+$2.30+$2.15) - 6*$11.95 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$17,062.90
= ($24.00-$48.35)*700 - 2*$8.95 commissions

Total Net Profit: -$12,334.60
= (+$4,728.30 +$0.00 -$17,062.90)

PBR Annualized Return on Investment -80.1%
(-$12,334.60/$33,853.95)*(365/166 days)


9. Potash of Saskatchewan Inc -- Closed

Transactions History:
11/28/08 Initial Stock Purchase Transaction -- Bought 200 POT @ $61.40
11/28/08 Initial Calls Sold Transaction -- Sold 2 POT Dec08 $65.00 Calls @ $4.00
12/20/08 Dec08 Options Exercised -- 400 shares POT called away
Note: Closing price of POT was $72.26 on expiration Friday

The overall performance results(including commissions) for the POT transactions through the Dec08 expiration was as follows:
Stock Purchase Cost: $12,288.95
($61.40*200+$8.95 commission)

Net Profit:
(a) Options Income: +$789.55 (200*$4.00 - $10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: +$702.10
= ($65.00-$61.40)*200 - 2*$8.95 commissions

Total Net Profit: +$1,491.65
= (+$789.55 +$0.00 +$702.10)

POT Annualized Return on Investment +201.4%
(+$1,491.65/$12,288.95)*(365/22 days)

1 comment:

  1. If I average out the nine annualized percent return-on-investment, I get an average return of about 68%. However, these are the totals I extracted from the post:

    Stock Purchase Cost: $169,331.65
    Options Income: $17,527.15
    Dividend Income: $162.00
    Capital Appreciation: -$46,695.10

    I'm thinking a "mark-to-market" approach might be a better way to state returns? Right now, it's a mix of apples and oranges on the annualized returns.

    I think it's one thing to state dividend and option income as a percent of return on the initial investment, but when you start mixing them in with capital appreciation over varying time frames, it's not really a meaningful return number.

    ReplyDelete