Monday, March 23, 2009

Establish Bank of America Covered Calls


A new covered call position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of Bank of America (BAC) covered calls.

A summary of the transactions is as follows:
Established Bank of America Corp Covered Calls for Apr09:
03/23/09 Bought 500 BAC @ $7.16
03/23/09 Sold 5 BAC Apr09 $6.00 Calls @ $1.76

Absolute Return if Exercised at $6.00: +8.4%
= [$1.76-($7.16-$6.00)]/$7.16
Annualized Return if Exercised: +117.1%
Downside Breakeven Price Point: $5.40
Downside Breakeven Protection: 24.6%

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