Monday, August 24, 2009

Establish Accenture Ltd. Covered Calls


A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of Accenture Ltd (ACN) covered calls as follows:

Established Accenture Ltd(ACN) Covered Calls for Sep09:
08/24/09 Bought 300 ACN @ $35.51
08/24/09 Sold 3 ACN Sep09 $35.00 Calls @ $1.15

Accenture Ltd. is a leading management consulting, technology services, and outsourcing company with worldwide operations. It is rated as a Strong Buy by both stock advisory services used by this advisor (Schwab Equity Ratings and MarketGrader.com) and also scored well above the minimum threshold of 20.0 on the Covered Calls Advisor's 'Buy Alerts' spreadsheet with a Total Points rating of 24.38.






















Note: For expanded view, left click on the spreadsheet above.

Some potential results from this transaction are:
Absolute Return if Exercised at $35.00: +1.8%
= [($1.15-($35.51-$35.00)]/$35.51
Annualized Return If Exercised (ARIE): +25.3%
= {[($1.15-($35.51-$35.00)]/$35.51}*(365/26 days)

Downside Breakeven Price Point: $34.36
Downside Breakeven Protection: 3.2%

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