Search This Blog

Sunday, May 23, 2010

May 2010 Expiration Transactions

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

- One position (Quanta Services Inc.) closed in-the-money. The calls were exercised and the 300 shares of PWR stock were called away. The annualized percent return-on-investment(ROI) results for this exercised position was +12.3%.

- Fourteen positions in the CCAP (AAPL, FLR, GPS, FXI, HPQ, IDCC, EEM, TNDM, NE, PKG, PWRD, POT, TBT, 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 Jun2010 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 Quanta Services position that was assigned (called away) upon May2010 expiration are as follows:

1. Quanta Services Inc.(PWR) -- Closed
The transactions history was as follows:
12/21/09 Bought 300 PWR @ $20.80
12/21/09 Sold 3 PWR Feb2010 $22.50 Calls @ $.50
02/20/2010 Feb2010 Options Expired
02/22/2010 Sell-to-Open (STO) 3 PWR Mar2010 $20.00s @ $.35
Note: Price of PWR was $19.20 today when the Mar2010 call options were sold.
03/20/2010 Mar2010 Options Expired
03/22/2010 Sell-to-Open (STO) 3 PWR Apr2010 $20.00s @ $.45
Note: Price of PWR was $19.72 today when the Apr2010 call options were sold.
04/17/2010 Apr2010 Options Expired
04/21/2010 Sell-to-Open (STO) 3 PWR May2010 $20.00s @ $.75
Note: Price of PWR was $20.15 when the May2010 options were sold.
5/22/2010 300 shares of PWR were in-the-money and the shares were called away (assigned) at $20.00. Note: The closing price of PWR was $21.12 on expiration Friday.

The overall performance results(including commissions) for the PWR transactions were as follows:

Stock Purchase Cost: $6,248.95
($20.80*300+$8.95 commission)

Net Profit:
(a) Options Income: +$570.20
= (300*($.50 +$.35 +$.45+$.75) - 4*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $20.00): -$248.95
= ($20.00-$20.80)*300 - $8.95 commissions

Total Net Profit(Stock assigned at $20.00): +$321.25
= (+$570.20 +$0.00 -$248.95)

Absolute Return (Stock assigned at $20.00): +5.1%
= +$321.25/$6,248.95
Annualized Return: +12.3%
= (+$321.25/$6,248.95)*(365/152 days)