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Sunday, February 21, 2010

February 2010 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of twelve covered calls positions with February 2010 expirations, with the following results:
- Two positions (Intel and Potash Corp.) closed in-the-money. The calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results for these two exercised positions were:

Intel Corporation(INTC): +44.0%
Potash Corp. of Saskatchewan, Inc.(POT): +112.6%

- Ten positions in the CCAP (AMGN, ESV, RSX, MFLX, NOV, NE, PKG, PWR, and SOHU) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Mar2010 covered call positions. The related transactions will be made this week and the actual transactions will be posted on this blog site on the same day they occur.

Detailed results for the two positions that were assigned (called away) upon Feb2010 expiration are as follows:

1. Intel Corporation(INTC) -- Closed
The transactions history was as follows:
01/27/2010 Bought 300 INTC @ $20.03
01/27/2010 Sold 3 INTC Feb2010 $20.00 Call Options @ $.52
02/03/2010 Ex-Dividend: $47.25 = $.1575*300 shares
02/20/2010 Feb2010 Options Expired
Note: Price of INTC was $20.82 upon Feb2010 expiration.

The overall performance results(including commissions) for the INTC transactions were as follows:
Stock Purchase Cost: $6,017.95
= ($20.03*300+$8.95 commission)

Net Profit:
(a) Options Income: +$144.80
= (300*$.52 - $11.20 commissions)
(b) Dividend Income: +$47.25
(c) Capital Appreciation (Stock exercised at $20.00): -$17.95
= ($20.00-$20.03)*300 - $8.95 commissions

Total Net Profit(Stock exercised at $20.00): +$174.10
= (+$144.80 +$47.25 -$17.95)

Absolute Return (Stock Exercised at $20.00): +2.9%
= +$174.10/$6,017.95
Annualized Return: +44.0%
= (+$174.10/$6,017.95)*(365/24 days)

2. Potash Corp. of Saskatchewan, Inc.(POT) -- Closed
The transactions history was as follows:
01/25/2010 Bought 100 POT @ $109.15
01/25/2010 Sold 1 POT Feb2010 $115.00 Call Option @ $3.10
02/20/2010 Feb2010 Options Expired
Note: Price of POT was $115.14 upon Feb2010 expiration.

The overall performance results(including commissions) for the POT transactions were as follows:
Stock Purchase Cost: $10,923.95
= ($109.15*100+$8.95 commission)

Net Profit:
(a) Options Income: +$300.30
= (100*$3.10 - $9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $115.00): +$576.05
= ($115.00-$109.15)*100 - $8.95 commissions

Total Net Profit(Stock exercised at $115.00): +$876.35
= (+$300.30 +$0.00 +$576.05)

Absolute Return (Stock Exercised at $115.00): +8.0%
= +$876.35/$10,923.95
Annualized Return: +112.6%
= (+$876.35/$10,923.95)*(365/26 days)

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