Search This Blog

Tuesday, March 10, 2009

Fluor Corporation -- Continuation Transaction

The following transaction was made to establish a covered calls position against the 600 shares owned in Fluor Corporation (FLR):
03/09/09 Sell-to-Open (STO) 6 FLR Mar09 $40s @ $.65

The transactions history to date is as follows:
11/24/08 Initial Stock Purchase Transaction -- Bought 600 FLR @ $35.35
11/24/08 Initial Calls Sold Transaction -- Sold 6 FLR Dec08 $35 Calls @ $3.50
12/03/08 Ex-Dividend of $75.00 ($.125*600 shares)
12/05/08 Roll-Up-And-Out Transaction:
Bought to Close 6 FLR Dec08 $35 Calls @ $10.10
Sold to Open 6 FLR Jan09 $45 Calls @ $5.30
01/17/09 Jan09 Options Expired
01/28/09 Continuation Transaction -- Sell-to-Open (STO) 6 FLR Feb09 $45s @ $2.10
Note: The price of FLR was $43.35 when the calls were sold.
02/21/09 Feb09 Options Expired
03/04/09 Ex-Dividend of $75.00 ($.125*600 shares)
03/09/09 Sell-to-Open (STO) 6 FLR Mar09 $40s @ $.65
Note: The price of FLR was $37.04 today when the calls were sold.

The overall performance results(including commissions) for the FLR transactions are as follows:
Stock Purchase Cost: $21,218.95
($35.35*600+$8.95 commission)

Net Profit:
(a) Options Income: +$816.20 (600*($3.50-$10.10+$5.30+$2.10+$.65) - 4*$13.45 commissions)
(b) Dividend Income: +$150.00 ($.125*600 shares)* 2 distributions
(c) Capital Appreciation (If stock price unchanged): +$1,005.05
= ($37.04-$35.35)*600 - $8.95 commissions
(d) Capital Appreciation (If exercised): +$2,781.05
= ($40.00-$35.35)*600 - $8.95 commissions

Total Net Profit(If stock price unchanged at $37.04): +$1,971.25
= (+816.20 +$150.00 +$1,005.05)
Total Net Profit(If stock price exercised at $40.00): +$3,747.25
= (+$816.20 +$150.00 +$2,781.05)

Absolute Return if Unchanged: +9.3%
Annualized Return If Unchanged (ARIU): +29.0%
(+$1,971.25/$21,218.95)*(365/117 days)

Absolute Return if Exercised: +17.7%
Annualized Return If Exercised (ARIE) +55.1%
(+$3,747.25/$21,218.95)*(365/117 days)

No comments:

Post a Comment