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Tuesday, December 15, 2009

Continuation Transaction -- Fluor Corporation

Today, the Covered Calls Advisor Portfolio(CCAP) established a covered calls position in Fluor Corporation (FLR) by selling 3 Jan2010 options against the 300 shares owned in Fluor as follows:

12/15/09 Sell-to-Open (STO) 3 FLR Jan2010 $45.00s @ $1.10

The transactions history to date and the profit potential for the continuation covered calls position in FLR is as follows:
09/22/09 Bought 300 FLR @ $54.93
09/22/09 Sold 3 FLR Oct09 $55.00 Calls @ $1.95
10/17/09 Oct09 Options Expired
The closing price of FLR was $50.24 on expiration Friday.
10/19/09 Sell-to-Open (STO) 3 FLR Nov09 $55.00s @ $.95
The price of FLR was $51.57 today when this transaction was executed.
11/11/09 Buy-to-Close (BTC) 3 FLR Nov09 $55.00s @ $.05
11/11/09 Sell-to-Open (STO) 3 FLR Nov09 $45.00s @ $1.15
Note: Net Credit-Spread upon Roll-Down was $1.10 ($1.15 - $.05)
11/21/09 Nov09 Options Expired
The closing price of FLR was $44.19 on expiration Friday.
12/15/09 Sell-to-Open (STO) 3 FLR Jan2010 $45.00s @ $1.10
Note: The price of FLR was $43.10 today when this transaction was made.

Some possible overall performance results(including commissions) for the FLR transactions would be as follows:
Stock Purchase Cost: $16,487.95
= ($54.93*300+$8.95 commission)

Net Profit:
(a) Options Income: +$1,485.20
= (300*($1.95+$.95-$.05+$1.15+$1.10) - 4*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $43.10): -$3,557.95
= ($43.10-$54.93)*300 - $8.95 commissions
(c) Capital Appreciation (If exercised at $45.00): -$2,987.95
= ($45.00-$54.93)*300 - $8.95 commissions


Total Net Profit(If stock price unchanged at $43.10): -$2,072.75
= (+$1,485.20 +$0.00 -$3,557.95)
Total Net Profit(If stock price exercised at $45.00): -$1,502.75
= (+$1,485.20 +$0.00 -$2,987.95)

Absolute Return if Stock Price Unchanged at $43.10: -12.6%
= -$2,072.75/$16,487.95
Annualized Return If Stock Price Unchanged (ARIU): -39.6%
= (-$2,072.75/$16,487.95)*(365/116 days)

Absolute Return if Exercised at $45.00: -9.1%
= -$1,502.75/$16,487.95
Annualized Return If Exercised (ARIE) -28.7%
= (-$1,502.75/$16,487.95)*(365/116 days)

1 comment:

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    ReplyDelete