Saturday, February 21, 2009

February 2009 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of 15 positions with February 2009 expirations, with the following results:
- 4 positions (ESRX, HUM, MSFT & POT) closed in-the-money.
The calls were exercised and the stock was called away. The roll-up transactions made early in February worked very nicely for both Humana and Potash. The annualized percent return-on-investment(ROI) results were:

Express Scripts(ESRX) -0.1%
Humana(HUM) +148.6%
Microsoft(MSFT) -32.0%
Potash(POT) +119.0%

- 11 positions in the CCAP (MO,AOB,BAC,FLR,HPQ,HD,FXI,EWY,IWN,JCOM, and USO) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Mar09 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 Express Scripts, Humana, Microsoft and Potash exercised positions are as follows:

1. Express Scripts -- Closed
The Transactions History was as follows:
12/22/08 Initial Stock Purchase Transaction -- Bought 200 ESRX @ $59.86
12/22/08 Inital Calls Sold Transaction -- Sold 2 ESRX Jan09 $60.00 Calls @ $2.90
01/17/09 Jan09 Options Expired
01/22/09 Continuation Transaction -- Sell-to-Open (STO) 2 ESRX Feb09 $55s @ $2.10
Note: The price of ESRX was $52.40 today when the Feb09 options were sold.
02/21/09 Feb09 Options Exercised (200 shares of ESRX called away)
Note: Closing price of ESRX was $56.27 on expiration Friday.


The overall performance results(including commissions) for the ESRX transactions were as follows:
Stock Purchase Cost: $11,980.95
($59.86*200+$8.95 commission)

Net Profit:
(a) Options Income: +$979.10 (200*($2.90+$2.10) - 2*$10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$980.95
= ($55.00-$59.86)*1000 - $8.95 commissions

Total Net Profit: -$1.85
= (+$979.10 +$0.00 -$980.95)

Annualized Return: -0.1%
(-$1.85/$11,980.95)*(365/61 days)


2. Humana Inc. -- Closed
The Transactions History was as follows:
11/24/08 Initial Stock Purchase Transaction -- Bought 1000 HUM @ $25.55
11/24/08 Inital Calls Sold Transaction -- Sold 10 HUM Dec08 $25.00 Calls @ $2.90
Roll-Up-And-Out Spread Transaction:
12/08/08 Buy-to-Close (BTC) 10 HUM Dec08 $25s @ $5.50
12/08/08 Sell-to-Open (STO) 10 HUM Jan09 $30s @ $3.10
Roll-Up Spread Transaction:
12/30/08 Buy-to-Close (BTC) 10 HUM Jan09 $30s @ $5.30
12/30/08 Sell-to-Open (STO) 10 HUM Jan09 $35s @ $1.90
01/17/09 Jan09 Options Expired
01/21/09 Sell-to-Open (STO) 10 HUM Feb09 $35s @ $1.40
Note: Price of HUM was $32.87 when this transaction was executed.
Roll-Up Spread Transaction:
02/02/09 Buy-to-Close (BTC) 10 HUM Feb09 $35s @ $5.48
02/02/09 Sell-to-Open (STO) 10 HUM Feb09 $40s @ $1.88
Note: The price of HUM was $40.02 today when the roll-up transaction was executed.
02/21/09 Feb09 Options Exercised (1000 shares of HUM called away)
Note: Closing price of HUM was $40.54 on expiration Friday.

The overall performance results(including commissions) for the HUM transactions through the Feb09 expiration were as follows:

Stock Purchase Cost: $25,558.95 ($25.55*1,000+$8.95 commission)
Net Profit:
(a) Options Income: -$5,182.25 (1000*($2.90-$5.50+$3.10-$5.30+$1.90+$1.40-$5.48+$1.88) - 5*$16.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: +$14,441.05 = ($40.00-$25.55)*1000 - $8.95 commissions

Total Net Profit: +$9,258.80
= (-$5,182.25 +$0.00 +$14,441.05)

Annualized Return: +148.6%
(+$9,258.80/$25,558.95)*(365/89 days)

3. Microsoft Corporation -- Closed
The Transactions History was as follows:
08/18/08 Initial Stock Purchase Transaction -- Bought 500 MSFT @ $27.95
08/18/08 Inital Calls Sold Transaction -- Sold 5 MSFT Sep08 $28.00 Calls @ $.81
09/11/08 $55.00 Dividend Received ($.11*500 shares)
09/20/08 Sep08 Options Expired
09/26/08 Covered Calls Continuation Transaction -- STO 5 Oct08 $28.00 Calls @ $.55
10/18/08 Oct08 Options Expired
10/20/08 Sold 5 MSFT Nov08 $22.50 Calls @ $1.75
11/22/08 Nov08 Options Expired
11/24/08 Sold 5 MSFT Dec08 $20 Calls @$.80
12/11/08 $65.00 Dividend Received ($.13*500 shares)
12/20/08 Dec08 Options Expired
12/23/08 Covered Calls Continuation Transaction -- STO 5 Jan09 $21.00 Calls @ $.36
01/17/09 Jan09 Options Expired
01/28/09 Continuation Transaction -- Sell-to-Open (STO) 5 MSFT Feb09 $18s @ $.70
Note: The price of MSFT was $18.10 today when the calls were sold.
02/17/09 $65.00 Ex-Dividend ($.13*500 shares)
02/21/09 Feb09 Options Exercised (500 shares of MSFT called away)
Note: Closing price of MSFT was $18.00 on expiration Friday.

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: +$2,503.80 (500*($.81+$.55+$1.75+$.80+$.36+$.70) - 6*$12.70 commissions)
(b) Dividend Income: +$185.00 ($55.00+$65.00+$65.00)
(c) Capital Appreciation: -$4,983.95
= ($18.00-$27.95)*500 - $8.95 commissions

Total Net Profit(Stock exercised at $18.00): -$2,295.15
= (+$2,503.80 +$185.00 -$4,983.95)

Annualized Return: -32.0%
(-$2,295.15/$13,983.95)*(365/187 days)


4. Potash Corp of Saskatchewan Inc -- Closed
The Transactions History was as follows:
12/22/08 Initial Stock Purchase Transaction -- Bought 200 POT @ $65.84
12/22/08 Inital Calls Sold Transaction -- Sold 2 POT Jan09 $65.00 Calls @ $5.90
Roll-Up Spread Transaction:
01/02/09 Buy-to-Close (BTC) 2 POT Jan09 $65s @ $11.35
01/02/09 Sell-to-Open (STO) 2 POT Jan09 $75s @ $4.35
01/15/09 $20.00 Ex-Dividend ($.10*200 shares)
01/17/09 Jan09 Options Expired
01/22/09 Continuation Transaction -- Sell-to-Open (STO) 2 POT Feb09 $70s @ $7.20
Note: The price of POT was $72.36 today when the calls were sold.
Roll-Up Spread Transaction:
02/04/09 Buy-to-Close (BTC) 2 POT Feb09 $70s @ $10.60
02/04/09 Sell-to-Open (STO) 2 POT Feb09 $80s @ $3.60
Net Debit on Roll Up $7.00 ($10.60-$3.60)
Note: The price of POT was $79.42 today when the spread was transacted.
02/21/09 Feb09 Options Exercised (200 shares of POT called away)
Note: Closing price of POT was $83.96 on expiration Friday.

The overall performance results(including commissions) for the POT transactions through the Feb09 expiration were as follows:

Stock Purchase Cost: $13,176.95
($65.84*200+$8.95 commission)

Net Profit:
(a) Options Income: -$221.80
(200*($5.90-$11.35+$4.35+$7.20-$10.60+$3.60) - 4*$10.45 commissions)
(b) Dividend Income: +$20.00
(c) Capital Appreciation: +$2,823.05
= ($80.00-$65.84)*200 - $8.95 commissions

Total Net Profit: +$2,621.25
= (-$221.80 +$20.00 +$2,823.05)

Annualized Return: +119.0%
(+$2,621.25/$13,176.95)*(365/61 days)

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