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Monday, August 24, 2009

Synaptics Inc (SYNA) -- Closed

The Covered Calls Advisor Portfolio (CCAP) covered calls position in Synaptics Inc(SYNA) was closed out today (8/24/09). Synaptics' share price plunged almost 30% on 7/31 when the 4th quarter earnings report was released. Quarterly sales and earnings achieved expectations but sales guidance for the next quarter was 9.8% below analysts' projections which resulted in the dramatic price decline. The error made regarding this position was not waiting 8 days until after the earnings were released before deciding whether or not to establish the position. In the future when there is a pending earnings announcement, this advisor intends to wait until after the earnings release before deciding whether or not to establish a covered calls position.

The transactions history on this SYNA position was as follows:
07/23/09 Bought 300 SYNA @ $33.95
07/23/09 Sold 3 SYNA Aug09 $35.00 Calls @ $1.80
08/22/09 Aug09 Options Expired
08/24/09 Sold 300 SYNA @ $25.90

The overall performance results(including commissions) for the SYNA transactions were as follows:
Stock Purchase Cost: $10,193.95
($33.95*300+$8.95 commission)

Net Profit:
(a) Options Income: +$288.80 (300*$1.80 - $11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$2,423.95
= ($25.90-$33.95)*300 - $8.95 commissions

Total Net Profit: -$2,135.15
= (+$288.80 +$0.00 -$2,423.95)

Absolute Return = -20.9%
= -$2,135.15/$10,193.95

Annualized Return: -254.8%
= (-$2,135.15/$10,193.95)*(365/30 days)

1 comment:

  1. Dick in the DesertAugust 24, 2009 at 11:53 PM

    I was looking forward to this "teaching moment" on SYNA, Jeff. I concur that steering clear of the days immediately before and after earnings announcements is something that we should keep in mind going forward. Thanks for your feedback on this one.