Sunday, March 21, 2010

March 2010 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of twelve covered calls positions with March 2010 expirations, with the following results:

- During the week prior to expiration, in-the-money covered call positions in three equities [Apple Inc.(AAPL), Fluor Corp.(FLR), and Gap Inc.(GPS)] were rolled to Apr2010 expirations. These roll-out transactions were detailed in prior posts this week on this blog.

- Three positions (Amgen, iShares Brazil ETF, and Market Vectors Russia ETF) closed in-the-money. The calls were exercised and the equities were called away. The annualized percent return-on-investment(ROI) results for these three exercised positions were:

Amgen Inc.(AMGN): +26.9%
iShares MSCI Brazil ETF (EWZ): +5.6%
Market Vecotrs Russia ETF (RSX): +8.3%

- Six positions in the CCAP (AHL, CHU, FXI, NE, NOV, and PWR) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Apr2010 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 three positions that were assigned (called away) upon Mar2010 expiration are as follows:

1. Amgen Inc.(AMGN) -- Closed
The transactions history was as follows:
10/22/09 Bought 200 AMGN @ $56.40
10/22/09 Sold 2 AMGN Nov09 $57.50 Calls @ $1.20
11/21/09 Nov09 Options Expired
11/23/09 Sell-to-Open (STO) 2 AMGN Dec09 $57.50s @ $.93
Note: Price of AMGN was $56.15 when the Dec09 options were sold.
12/19/09 Dec09 Options Expired
12/21/09 Sell-to-Open (STO) 2 AMGN Jan2010 $57.50s @ $1.14
Note: Price of AMGN was $56.80 when the Jan2010 options were sold.
01/16/2010 Jan2010 Options Expired
01/19/2010 Sell-to-Open (STO) 2 AMGN Feb2010 $57.50s @ $1.45
Note: Price of AMGN was $57.02 when the Feb2010 options were sold.
02/20/2010 Feb2010 Options Expired
03/03/2010 Sell-to-Open (STO) 2 AMGN Mar2010 $57.50s @ $.69
Note: Price of AMGN was $57.16 when the Mar2010 options were sold.
03/20/2010 Mar2010 Options Expired
Note: Price of AMGN was $60.00 upon Mar2010 expiration.

The overall performance results(including commissions) for the AMGN transactions were as follows:
Stock Purchase Cost: $11,288.95
= ($56.40*200+$8.95 commission)

Net Profit:
(a) Options Income: +$1,029.75
= (200*($1.20+$.93+$1.14+$1.45+$.69) - 5*$10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $57.50): +$211.05
= ($57.50-$56.40)*200 - $8.95 commissions

Total Net Profit(If stock exercised at $57.50): +$1,240.80
= (+$1,029.75 +$0.00 +$211.05)

Absolute Return (Stock Exercised at $57.50): +11.0%
= (+$1,240.80/$11,288.95)
Annualized Return: +26.9%
= (+$1,240.80/$11,288.95)*(365/149 days)

2. iShares MSCI Brazil ETF (EWZ)
The transactions history was as follows:
12/21/09 Bought 200 EWZ @ $74.48
12/21/09 Sold 2 EWZ Jan2010 $76.00 Calls @ $1.67
01/16/2010 Jan2010 Options Expired
01/19/2010 Sell-to-Open (STO) 2 EWZ Feb2010 $76.00s @ $1.80
Note: Price of EWZ was $74.32 when the Feb2010 options were sold.
02/20/2010 Feb2010 Options Expired
03/01/2010 Sell-to-Open (STO) 2 EWZ Mar2010 $71.00s @ $1.23
Note: Price of EWZ was $69.42 when the Mar2010 options were sold.
03/20/2010 Mar2010 Options Expired
Note: Price of EWZ was $71.30 upon Mar2010 expiration.

The overall performance results(including commissions) for the EWZ transactions were as follows:
Stock Purchase Cost: $14,904.95
= ($74.48*200+$8.95 commission)

Net Profit:
(a) Options Income: +$908.65
= (200*($1.67+$1.80+$1.23) - 3*$10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If exercised at $71.00): -$704.95
= ($71.00-$74.48)*200 - $8.95 commissions

Total Net Profit(Stock exercised at $71.00): +$203.70
= (+$908.65 +$0.00 -$704.95)

Absolute Return (Stock Exercised at $71.00): +1.4%
= +$203.70/$14,904.95
Annualized Return: +5.6%
= (+$203.70/$14,904.95)*(365/89 days)

3. Market Vectors Russia ETF (RSX) -- Closed
The transactions history was as follows:
01/20/2010 Bought 300 RSX @ $33.68
01/20/2010 Sold 3 RSX Feb2010 $34.00 Calls @ $1.20
02/20/2010 Feb2010 Options Expired
03/01/2010 Sold 3 RSX Mar2010 $33.00 Calls @ $.45
Note: Price of RSX was $31.52 when the Mar2010 options were sold.
03/20/2010 Mar2010 Options Expired
Note: Price of RSX was $33.29 upon Mar2010 expiration.

The overall performance results(including commissions) for the RSX transactions were as follows:
Stock Purchase Cost: $10,112.95
= ($33.68*300+$8.95 commission)

Net Profit:
(a) Options Income: +$348.80
= (300*($1.20+$.45) - 2*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $33.00): -$212.95
= ($33.00-$33.68)*300 - $8.95 commissions

Total Net Profit(Stock exercised at $33.00): +$135.85
= (+$348.80 +$0.00 -$212.95)

Absolute Return (Stock Exercised at $33.00): +1.3%
= +$135.85/$10,112.95
Annualized Return: +8.3%
= (+$135.85/$10,112.95)*(365/59 days)

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