Sunday, September 20, 2009

September 2009 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of eleven positions with September 2009 expirations, with the following results:

- Just prior to Sep09 expiration, in-the-money covered call positions in four equities [Accenture(ACN), iShares MSCI China Fund ETF(FXI), iShares MSCI Emerging Markets ETF(EEM), and Noble Corporation(NE)] were rolled to Oct09 expirations. These roll-out transactions were detailed in prior posts this week on this blog.

- One position in the CCAP [ProShares Short S&P 500 ETF(SH)] ended out-of-the-money. A decision will be made to either sell the equity or to keep it and sell calls to establish an Oct09 covered call position. The related transaction will be made early next week and the transaction will be posted on this blog site on the same day it occurs.

- Six positions [Aspen Insurance Holdings Ltd(AHL), Diana Shipping Inc.(DSX), EMCOR Group Inc.(EME), Herbalife Ltd(HLF), Sohu.com Inc.(SOHU), and the United States Natural Gas Fund ETF(UNG)] closed in-the-money. The calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results for these six exercised positions were:
Aspen Insurance Holdings Ltd(AHL): +32.1%
Diana Shipping Inc.(DSX): +32.4%
EMCOR Group Inc.(EME): +58.1%
Herbalife Ltd(HLF): +60.1%
Sohu.com Inc.(SOHU): +86.3%
United States Natural Gas Fund ETF(UNG): -34.9%

Detailed results for these six positions that were assigned (called away) upon Sep09 expiration are as follows:

1. Aspen Insurance Holdings Ltd(AHL) -- Closed
The transactions history was as follows:
07/21/09 Bought 500 AHL @ $24.95
07/21/09 Sold 5 AHL Aug09 $25.00 Calls @ $.90
08/22/09 Aug09 Options Expired
Note: Price of AHL closed at $24.74 on expiration Friday.
08/25/09 Sold 500 AHL @ $.50
09/19/09 Sep09 Options Exercised (500 shares of AHL called away at $25.00)
Note: Closing price of AHL was $26.64 on expiration Friday.

The overall performance results(including commissions) for the AHL transactions are as follows:
Stock Purchase Cost: $13,088.95
($24.95*500+$8.95 commission)

Net Profit:
(a) Options Income: +$674.60
= [500*($.90 + $.50) - 2*$12.70 commissions]
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $25.00): +$16.05
= ($25.00-$24.95)*500 - $8.95 commissions

Total Net Profit: +$690.65
= (+$674.60 +$0.00 +$16.05)

Absolute Return: +5.3%
= +$690.65/$13,088.95
Annualized Return: +32.1%
= (+$690.65/$13,088.95)*(365/60 days)

2. Diana Shipping Inc.(DSX) -- Closed
The transactions history was as follows:
08/24/09 Bought 300 DSX @ $13.52
08/24/09 Sold 3 DSX Sep09 $12.50 Calls @ $1.40
09/19/09 Sep09 Options Exercised (300 shares of DSX called away at $12.50)
Note: Closing price of DSX was $14.01 on expiration Friday.

The overall performance results(including commissions) for the DSX transactions are as follows:
Stock Purchase Cost: $4,064.95
($13.52*300+$8.95 commission)

Net Profit:
(a) Options Income: +$408.80
= [300*$1.40 - $11.20 commissions]
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $12.50): -$314.95
= ($12.50-$13.52)*300 - $8.95 commissions

Total Net Profit: +$93.85
= (+$408.80 +$0.00 -$314.95)

Absolute Return: +2.3%
= +$93.85/$4,064.95
Annualized Return: +32.4%
= (+$690.65/$13,088.95)*(365/26 days)

3. EMCOR Group Inc.(EME) -- Closed
The transactions history was as follows:
09/02/09 Bought 300 EME @ $22.62
09/02/09 Sold 3 EME Sep09 $22.50 Calls @ $.80
09/19/09 Sep09 Options Exercised (300 shares of EME called away at $22.50)
Note: Closing price of EME was $26.04 on expiration Friday.

The overall performance results(including commissions) for the EME transactions are as follows:
Stock Purchase Cost: $6,794.95
($22.62*300+$8.95 commission)

Net Profit:
(a) Options Income: +$228.80
= (300*$.80 - $11.20 commissions]
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $22.50): -$44.95
= ($22.50-$22.62)*300 - $8.95 commissions

Total Net Profit: +$183.85
= (+$228.80 +$0.00 -$44.95)

Absolute Return: +2.7%
= +$183.85/$6,794.95
Annualized Return: +58.1%
= (+$183.85/$6,794.95)*(365/17 days)

4. Herbalife Ltd.(HLF) -- Closed
The transactions history was as follows:
09/02/09 Bought 300 HLF @ $30.09
09/02/09 Sold 3 HLF Sep09 $30.00 Calls @ $1.00
09/19/09 Sep09 Options Exercised (300 shares of HLF called away at $30.00)
Note: Closing price of HLF was $33.30 on expiration Friday.

The overall performance results(including commissions) for the HLF transactions are as follows:
Stock Purchase Cost: $9,035.95
($30.09*300+$8.95 commission)

Net Profit:
(a) Options Income: +$288.80
= [300*$1.00 - $11.20 commissions]
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $30.00): -$35.95
= ($30.00-$30.09)*300 - $8.95 commissions

Total Net Profit: +$252.85
= (+$288.80 +$0.00 -$35.95)

Absolute Return: +2.8%
= +$252.85/$9,035.95
Annualized Return: +60.1%
= (+$252.85/$9,035.95)*(365/17 days)

5. Sohu.com Inc.(SOHU) -- Closed
The transactions history to date is as follows:
05/19/09 Initial Stock Purchase Transaction -- Bought 400 SOHU @ $54.50
05/19/09 Inital Calls Sold Transaction -- Sold 4 SOHU Jun09 $55.00 Calls @ $3.00
A debit-spread transaction was executed as follows:
05/29/09 Buy-to-Close (BTC) 4 SOHU Jun09 $55s @ $5.84
05/29/09 Sell-to-Open (STO) 4 SOHU Jun09 $60s @ $2.51
Note: The price of SOHU was $59.85 today when the debit-spread was transacted.
06/03/09 Buy-to-Close (BTC) 4 SOHU Jun09 $60s @ $6.15
06/03/09 Sell-to-Open (STO) 4 SOHU Jun09 $65s @ $2.89
Note: The price of SOHU was $65.02 today when the debit-spread was transacted.
06/20/09 Jun09 Options Expired
06/24/09 Sell-to-Open (STO) 4 SOHU Jul09 $65s @ $2.85
Note: The price of SOHU was $64.60 today when the debit-spread was transacted.
07/18/09 Jul09 Options Expired
The price of SOHU closed at $62.00 on expiration Friday.
07/20/09 Sell-to-Open (STO) 4 SOHU Aug09 $65.00s @ $3.40
The price of SOHU was $63.80 today when this transaction was executed.
08/22/09 Aug09 Options Expired
The price of SOHU closed at $64.09 on expiration Friday.
08/24/09 Sell-to-Open (STO) 4 SOHU Sep09 $65.00s @ $2.90
The price of SOHU was $64.90 today when this transaction was executed.
09/19/09 Sep09 Options Exercised (400 shares of SOHU called away at $65.00)
Note: Closing price of SOHU was $69.27 on expiration Friday.

The overall performance results(including commissions) for this SOHU covered calls position were as follows:
Stock Purchase Cost: $21,808.95
($54.50*400+$8.95 commission)

Net Profit:
(a) Options Income: +$2,152.30
= (400*($3.00-$5.84+$2.51-$6.15+$2.89+$2.85+$3.40+$2.90) - 6*$11.95 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $65.00): +$4,191.05
= ($65.00-$54.50)*400 - $8.95 commissions

Total Net Profit(Stock exercised at $65.00): +$6,343.35
= (+$2,152.30 +$0.00 +$4,191.05)

Annualized Return (Stock Exercised at $65.00): +86.3%
= (+$6,343.35/$21,808.95)*(365/123 days)

6. United States Natural Gas Fund ETF(UNG) -- Closed
The transactions history to date is as follows:
06/30/09 Bought 1000 UNG @ $13.92
06/30/09 Sold 10 UNG Jul09 $14.00 Calls @ $.75
07/18/09 Jul09 Options Expired
The price of UNG closed at $13.16 on expiration Friday.
07/22/09 Sell-to-Open (STO) 10 UNG Aug09 $14.00 Calls @ $.75
The price of UNG was $13.73 today when this transaction was executed.
08/22/09 Aug09 Options Expired
The price of UNG closed at $11.35 on expiration Friday.
09/09/09 Sell-to-Open (STO) 10 UNG Sep09 $11.00s @ $.40
The price of UNG was $10.79 today when this transaction was executed.
09/19/09 Sep09 Options Exercised (1000 shares of UNG called away at $11.00)
Note: Closing price of UNG was $11.64 on expiration Friday.

The overall performance results(including commissions) for the UNG transactions were as follows:
Stock Purchase Cost: $13,928.95
($13.92*1000+$8.95 commission)

Net Profit:
(a) Options Income: +$1,850.65
= (1000*($.75+$.75+$.40) - 3*$16.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Equity exercised at $11.00): -$2,928.95
= ($11.00-$13.92)*1000 - $8.95 commissions

Total Net Profit(UNG exercised at $11.00): -$1,078.30
= (+$1,850.65 +$0.00 -$2,928.95)

Absolute Return with UNG Exercised at $11.00: -7.7%
= -$1,078.30/$13,928.95
Annualized Return with UNG Exercised: -34.9%
= (-$1,078.30/$13,928.95)*(365/81 days)

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