Search This Blog

Friday, February 6, 2009

iShares MSCI China ETF -- Continuation Transaction

The following transaction was made to establish a covered calls position against the 700 shares owned in iShares MSCI China ETF (FXI):
02/06/09 Sell-to-Open (STO) 7 FXI Feb09 $30s @ $.50

The transactions history to date is as follows:
12/22/08 Initial Stock Purchase Transaction -- Bought 700 FXI @ $29.23
12/22/08 Initial Calls Sold Transaction -- Sold 7 FXI Jan09 $32.00 Calls @ $.95
01/17/09 Jan09 Options Expired
02/06/09 Continuation Transaction -- Sell-to-Open (STO) 7 FXI Feb09 $30s @ $.50
Note: The price of FXI was $28.33 today when the calls were sold.


The overall performance results(including commissions) for the FXI transactions are as follows:
Stock Purchase Cost: $20,469.95
($29.23*700+$8.95 commission)

Net Profit:
(a) Options Income: +$986.60 (700*($.95+$.50) - 2*$14.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged): -$638.95
= ($28.33-$29.23)*700 - $8.95 commissions
(d) Capital Appreciation (If exercised): +$530.05
= ($30.00-$29.23)*700 - $8.95 commissions

Total Net Profit(If stock price unchanged at $28.33): +$347.65
= (+$986.60 +$0.00 -$638.95)
Total Net Profit(If stock price exercised at $30.00): +$1,516.65
= (+$986.60 +$0.00 +$530.05)

Absolute Return if Unchanged: +1.7%
=+$347.65/$20,469.95
Annualized Return If Unchanged (ARIU): +10.2%
=(+$347.65/$20,469.95)*(365/61 days)

Absolute Return if Exercised: +7.4%
=+$1,516.65/$20,469.95
Annualized Return If Exercised (ARIE) +44.3%
=(+$1,516.65/$20,469.95)*(365/61 days)

No comments:

Post a Comment