Tuesday, January 20, 2009

United States Oil Fund ETF Continuation Transaction

The following transaction was made today to establish a covered calls position against the 200 shares owned in US Oil Fund ETF (USO):

The Transactions History to date is as follows:
12/19/08 Initial Stock Purchase Transaction -- Bought 200 USO @ $32.33
12/19/08 Initial Calls Sold Transaction -- Sold 2 USO Jan09 $34.00 Calls @ $2.40
01/17/09 Jan09 Options Expired
01/20/09 Covered Calls Continuation Transaction -- STO 2 Feb09 $32.00 Calls @ $1.90

The overall performance results(including commissions) for the USO transactions are as follows:
Stock Purchase Cost: $6,474.95
($32.33*200+$8.95 commission)

Net Profit:
(a) Options Income: +$839.10 (200*($2.40+$1.90) - 2*$10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If exercised): -$74.95
= ($32.00-$32.33)*200 - $8.95 commissions

Total Net Profit(If stock price exercised at $32.00): +$764.15
= (+$839.10 +$0.00 -$74.95)

Annualized Return If Exercised (ARIE) +67.3%
(+$764.15/$6,474.95)*(365/64 days)

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