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Saturday, August 22, 2009

August 2009 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of eight positions with August 2009 expirations, with the following results:
- Four positions (CHL, EME, HLF, and FXI) 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:

China Mobile Ltd. (CHL): +64.0%
EMCOR Group Inc (EME): +50.8%
Herbalife Ltd: +41.8%
iShares MSCI China Fund ETF (FXI): +29.6%

- Four positions in the CCAP (AHL,SOHU,SYNA, 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 Sep09 covered call positions. The related transactions will be made early next week 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 Aug09 expiration are as follows:

1. China Mobile Ltd(CHL) -- Closed
The transactions history was as follows:
04/20/09 Initial Stock Purchase Transaction -- Bought 400 CHL @ $45.65
04/20/09 Inital Calls Sold Transaction -- Sold 4 CHL May09 $45.00 Calls @ $2.40
A debit-spread transaction was executed as follows:
05/06/09 Buy-to-Close (BTC) 4 CHL May09 $45s @ $3.70
05/06/09 Sell-to-Open (STO) 4 CHL May09 $50s @ $.65
Note: The price of CHL was $48.51 today when the debit-spread was transacted.
05/11/09 Ex-Div of $362.32($.9058 * 400 shares)
05/16/09 May09 Options Expired
Note: The closing price of CHL closed at $46.06 on expiration Friday.
05/18/09 Sell-to-Open (STO) 4 CHL Jun09 $50s @ $1.25
Note: The price of CHL was $47.30 today when the call options were sold.
06/20/09 Jun09 Options Expired
06/24/09 Sell-to-Open (STO) 4 CHL Jul09 $50s @ $1.75
The price of CHL was $49.75 today when this transaction was executed.
07/18/09 Jul09 Options Expired
The price of CHL closed at $49.81 on expiration Friday.
07/20/09 Sell-to-Open (STO) 4 CHL Aug09 $50s @ $2.50
The price of CHL was $50.95 today when this transaction was executed.
08/21/09 Aug09 Options Exercised (400 shares of CHL called away)
Note: Closing price of CHL was $51.87 on expiration Friday.

The overall performance results(including commissions) for the CHL transactions are as follows:
Stock Purchase Cost: $18,268.95
($45.65*400+$8.95 commission)

Net Profit:
(a) Options Income: +$1,880.25
= (400*($2.40-$3.70+$.65+$1.25+$1.75+$2.50) - 5*$11.95 commissions)
(b) Dividend Income: +$362.32 ($.9058 * 400 shares)
(c) Capital Appreciation (Stock exercised at $50.00): +$1,731.05
= ($50.00-$45.65)*400 - $8.95 commissions

Total Net Profit: +$3,973.62
= (+$1,880.25 +$362.32 +$1,731.05)

Absolute Return: +21.8%
= +$3,973.62/$18,268.95
Annualized Return: +64.0%
= (+$3,973.62/$18,268.95)*(365/124 days)


2. EMCOR Group Inc(EME) -- Closed
The transactions history was as follows:
06/17/09 Bought 500 EME @ $19.81
06/17/09 Sold 5 EME Jul09 $20.00 Calls @ $1.40
07/18/09 Jul09 Options Expired
The price of EME closed at $19.94 on expiration Friday.
07/20/09 Sell-to-Open (STO) 4 EME Aug09 $20s @ $1.30
The price of EME was $20.04 today when this transaction was executed.
08/21/09 Aug09 Options Exercised (400 shares of EME called away)
Note: Closing price of EME was $24.90 on expiration Friday.

The overall performance results(including commissions) for the EME transactions are as follows:
Stock Purchase Cost: $9,913.95
= ($19.81*500+$8.95 commission)

Net Profit:
(a) Options Income: +$824.60
= (500*($1.40+$1.30) - 2*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $20.00): +$86.05
= ($20.00-$19.81)*500 - $8.95 commissions

Total Net Profit(Stock exercised at $20.00): +$910.65
= (+824.60 +$0.00 +$86.05)

Absolute Return: +9.2%
= +$910.65/$9,913.95
Annualized Return: +50.8%
= (+$910.65/$9,913.95)*(365/66 days)


3. Herbalife Ltd.(HLF) -- Closed
The transactions history was as follows:
07/20/09 Bought 500 HLF @ $32.10
07/20/09 Sold 5 HLF Aug09 $30.00 Calls @ $3.32
08/21/09 Aug09 Options Exercised (500 shares of HLF called away)
Note: Closing price of HLF was $32.99 on expiration Friday.

The overall performance results(including commissions) for the HLF transactions were as follows:
Stock Purchase Cost: $16,058.95
($32.10*500+$8.95 commission)

Net Profit:
(a) Options Income: +$1,647.30
= (500*$3.32) - $12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $30.00): -$1,058.95
= ($30.00-$32.10)*500 - $8.95 commissions

Total Net Profit: +$588.35
= (+$1,647.30 +$0.00 -$1,058.95)

Absolute Return: +3.7%
= +$588.35/$16,058.95
Annualized Return: +41.8%
= (+$588.35/$16,058.95)*(365/32 days)


4. iShares MSCI China Fund ETF(FXI) -- Closed
The transactions history was as follows:
07/22/09 Bought 1000 FXI @ $40.44
07/22/09 Sold 10 FXI Aug09 $39.00 Calls @ $2.45
08/21/09 Aug09 Options Exercised (1000 shares of FXI called away)
Note: Closing price of FXI was $40.78 on expiration Friday.

The overall performance results(including commissions) for the FXI transactions were as follows:
Stock Purchase Cost: $40,448.95
($40.44*1000+$8.95 commission)

Net Profit:
(a) Options Income: +$2,433.55
= 1000*$2.45 - $16.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $39.00): -$1,448.95
= ($39.00-$40.44)*1000 - $8.95 commissions

Total Net Profit: +$984.60
= (+$2,433.55 +$0.00 -$1,448.95)

Absolute Return: +2.4%
= +$984.60/$40,448.95
Annualized Return: +29.6%
= (+$984.60/$40,448.95)*(365/30 days)

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