Saturday, July 18, 2009

July 2009 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of nine positions with July 2009 expirations, with the following results:
- Four positions (ENDP, FDO, FXI, and IWM) closed in-the-money. The calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results for the four exercised positions were:

Endo Pharmaceuticals Holdings Inc (ENDP): +31.7%
Family Dollar Stores Inc (FDO): +46.8%
iShares MSCI China Fund ETF (FXI): +85.3%
iShares MSCI Russell 2000 Small Cap Index ETF (IWM): +28.6%

- Five positions in the CCAP (BAC,CHL,EME,SOHU,and UNG) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Aug09 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.

Detailed results for the four positions that were assigned (called away) upon Jul09 expiration are as follows:

1. Endo Pharmaceutical Holdings Inc(ENDP) -- Closed
The transactions history for the ENDP covered calls was:
04/21/09 Bought 500 ENDP @ $17.61
04/21/09 Sold 5 ENDP May09 $17.50 Calls @ $.85
05/16/09 May09 Options Expired
Note: The closing price of ENDP was $15.83 on expiration Friday.
05/20/09 Sell-to-Open (STO) 5 ENDP Jul09 $17.50 @ $.55
Note: The price of ENDP was $16.72 today when the call options were sold.
07/18/09 Jul09 Options Exercised (500 shares of ENDP called away)
Note: Closing price of ENDP was $18.16 on expiration Friday.


The overall performance results(including commissions) for the ENDP transactions was as follows:
Stock Purchase Cost: $8,813.95
($17.61*500+$8.95 commission)

Net Profit:
(a) Options Income: +$674.60 [500*($.85+$.55) - 2*$12.70 commissions]
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $17.50): -$63.95
= ($17.50-$17.61)*500 - $8.95 commissions

Total Net Profit(Stock exercised at $17.50): +$610.65
= (+$674.60 +$0.00 -$63.95)

Absolute Return: +7.7%
= +$674.60/$14,693.95
Annualized Return: +31.7%
= (+$674.60/$14,693.95)*(365/88 days)

2. Family Dollar Stores Inc(FDO) -- Closed
The transactions history for the FDO covered calls was:
06/29/09 Bought 500 FDO @ $28.68
06/29/09 Sold 5 FDO Jul09 $27.50 Calls @ $1.88
07/18/09 Jul09 Options Exercised (500 shares of FDO called away)
Note: Closing price of FDO was $30.73 on expiration Friday.

The overall performance results(including commissions) for the FDO transactions was as follows:
Stock Purchase Cost: $14,348.95
($28.68*500+$8.95 commission)

Net Profit:
(a) Options Income: +$927.30 (500*$1.88 - $12.70 commissions]
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $27.50): -$598.95
= ($27.50-$28.68)*500 - $8.95 commissions

Total Net Profit(Stock exercised at $27.50): +$328.35
= (+$927.30 +$0.00 -$598.95)

Absolute Return (Stock Exercised at $27.50): +2.4%
= [($1.88-($28.68-$27.50)]/$28.68
Annualized Return: +46.8%
= [($1.88-($28.68-$27.50))/$28.68]*(365/19 days)

3. iShares MSCI China Fund ETF(FXI) -- Closed
The transactions history for the FXI covered calls was:
06/22/09 Bought 1200 FXI @ $36.14
06/22/09 Sold 12 FXI Jul09 $37.00 Calls @ $1.40
07/18/09 Jul09 Options Exercised (1200 shares of FXI called away)
Note: Closing price of FXI was $39.34 on expiration Friday.

The overall performance results(including commissions) for the FXI transactions was as follows:
Stock Purchase Cost: $43,376.95
($36.14*1200+$8.95 commission)

Net Profit:
(a) Options Income: +$1,662.05 (1200*$1.40 - $17.95 commissions]
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $37.00): +$975.05
= ($37.00-$36.18)*1200 - $8.95 commissions

Total Net Profit(Stock exercised at $37.00): +$2,637.10
= (+$1,662.05 +$0.00 +$975.05)

Absolute Return (Stock Exercised at $37.00): +6.1%
= ($2,637.10/$43,376.95)
Annualized Return: +85.3%
= ($2,637.10/$43,376.95)*(365/26 days)

4. iShares MSCI Russell 2000 Small Cap Index Fund ETF(IWM) -- Closed
The transactions history for the FXI covered calls was:
05/21/09 Initial Stock Purchase Transaction -- Bought 500 IWM @ $48.22
05/21/09 Inital Calls Sold Transaction -- Sold 5 IWM Jun09 $47.00 Calls @ $2.87
A roll-up debit-spread transaction was executed as follows:
06/02/09 Buy-to-Close (BTC) 5 IWM Jun09 $47s @ $6.00
06/02/09 Sell-to-Open (STO) 5 IWM Jun09 $53s @ $1.51
Note: The price of IWM was $52.83 today when the debit-spread was transacted.
06/20/09 Jun09 Options Expired
06/24/09 Sell-to-Open (STO) 5 IWM Jul09 $51s @ $1.13
The price of IWM was $50.15 today when this transaction was executed.
07/18/09 Jul09 Options Exercised (500 shares of IWM called away)
Note: Closing price of IWM was $51.90 on expiration Friday.

The overall performance results(including commissions) for the IWM transactions was as follows:
Stock Purchase Cost: $24,118.95
= ($48.22*500+$8.95 commission)

Net Profit:
(a) Options Income: -$283.10
= (500*($2.87-$6.00+$1.51+$1.13) - 3*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $51.00): +$1,381.05
= ($51.00-$48.22)*500 - $8.95 commissions

Total Net Profit(Stock exercised at $51.00): +$1,097.95
= (-$283.10 +$0.00 +$1,381.05)

Absolute Return (Stock Exercised at $51.00): +4.6%
= +$1,097.95/$24,118.95
Annualized Return: +28.6%
= (+$1,097.95/$24,118.95)*(365/58 days)

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