Sunday, September 19, 2010

September 2010 Expiration Transactions

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

- Six positions (Apple, Best Buy, Cubist Pharmaceuticals, Guess? Inc., Neutral Tandem, and ProShares UltraShort 20+ Year Treasury ETF) closed in-the-money. The calls were exercised and the shares of AAPL, BBY, CBST, GES, TNDM, and TBT were called away. As shown in detail below, the annualized returns for these closed positions were:
(1) Apple Inc.(AAPL) -- +55.1%
(2) Best Buy Corp Inc.(BBY) -- +3.7%
(3) Cubist Pharmaceuticals (CBST) -- +55.3%
(4) Guess? Inc.(GES) -- +161.2%
(5) Neutral Tandem Inc.(TNDM) -- +56.5%
(6) ProShares UltraShort 20+ Year Treasury ETF (TBT) -- -35.4%

- Three positions in the CCAP [Domtar Corp.(UFS), iShares MSCI China ETF (FXI), and Petrobras (PBR)] ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Oct2010 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 six covered calls positions that were assigned (called away) upon Sep2010 expiration are as follows:

1. Apple Inc.(AAPL) -- Closed
The transactions history was as follows:
02/24/2010 Bought 100 AAPL @ $198.677
02/24/2010 Sold 1 AAPL Mar2010 $210.00 Call @ $1.57
Roll-Up-and-Out Transaction:
03/19/2010 Buy-to-Close (BTC) 1 AAPL Mar2010 $210.00 @ $12.20
03/19/2010 Sell-to-Open (STO) 1 AAPL Apr2010 $230.00s @ $3.40
Note: The price of AAPL was $222.18 today when this debit-spread was transacted.
04/16/2010 Buy-to-Close (BTC) 1 AAPL Apr2010 $230.00 @ $19.00
04/16/2010 Sell-to-Open (STO) 1 AAPL May2010 $250.00 @ $9.40
Note: The price of AAPL was $248.90 today when this debit-spread was transacted.
5/22/2010 May2010 Option Expired
Note: The closing price of AAPL was $242.32 on expiration Friday
6/01/2010 Sold 1 AAPL Jun2010 $260.00 @ $9.50
Note: The price of AAPL was approximately $261.35 when this option was sold.
6/18/2010 Buy-to-Close (BTC) 1 AAPL Jun2010 $260.00 @ $13.90
6/18/2010 Sell-to-Open (STO) 1 AAPL Jul2010 $280.00 @ $7.50
Note: The price of AAPL was $273.88 today when this debit-spread was transacted.
07/17/2010 Jul2010 Option Expired
Note: The closing price of AAPL was $249.90 on expiration Friday.
07/22/2010 Sold 1 AAPL Aug2010 $270.00 Call @ $4.35
Note: The price of AAPL was $258.02 today when this option was sold.
08/21/2010 Aug2010 Option Expired
Note: The closing price of AAPL was $249.64 on expiration Friday.
09/01/2010 Sold 1 AAPL Sept2010 $270.00 Call Option @ $.68
Note: The price of AAPL was $251.35 today when this option was sold.
09/18/2010 100 shares of AAPL were in-the-money and the shares were called away (assigned) at $270.00. Note: The closing price of AAPL was $275.37 on expiration Friday.

The performance results(including commissions) for the Apple Inc.(AAPL) transactions were as follows:
Stock Purchase Cost: $19,876.65
= ($198.677*100+$8.95 commission)

Net Profit:
(a) Options Income: -$937.90
= (100*($1.57-$12.20+$3.40-$19.00+$9.40+$9.50-$13.90+$7.50+$4.35+$.68) - 7*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock called away at $270.00): +$7,123.35
= ($270.00-$198.677)*100 - $8.95 commissions

Total Net Profit(Stock assigned at $270.00): +$6,185.45
= (-$937.90 +$0.00 +$7,123.35)

Absolute Return (Stock assigned at $270.00): +31.1%
= +$6,185.45/$19,876.65
Annualized Return: +55.1%
= (+$6,185.45/$19,876.65)*(365/206 days)


2. Best Buy Corp Inc.(BBY) -- Closed
The transactions history was as follows:
06/23/2010 Bought 400 BBY @ $36.08
06/23/2010 Sold 4 BBY Jul2010 $37.00 Calls @ $.82
07/17/2010 Jul2010 Options Expired
Note: The closing price of BBY was $34.33 on expiration Friday.
07/22/2010 Sold 4 BBY Aug2010 $35.00 Calls @ $1.06
Note: The price of BBY was $34.68 today when this option was sold.
08/21/2010 Aug2010 Option Expired
Note: The closing price of BBY was $32.50 on expiration Friday.
09/02/2010 Sold 4 BBY Sep2010 $34.00 Call Options @ $.64
Note: The price of BBY was $33.07 today when these options were sold.
09/18/2010 400 shares of BBY were in-the-money and the shares were called away (assigned) at $34.00. Note: The closing price of BBY was $37.15 on expiration Friday.

The overall performance results(including commissions) for Best Buy Co Inc.(BBY) transactions were as follows:
Stock Purchase Cost: $14,440.95
= ($36.08*400+$8.95 commission)

Net Profit:
(a) Options Income: +$972.15
= 400*($.82+$1.06+$.64) - 3*$11.95
(c) Capital Appreciation (BBY assigned at $34.00): -$840.95
= ($34.00-$36.08)*400 - $8.95 commissions

Total Net Profit(If BBY assigned at $34.00): +$131.20
= (+$972.15 +$0.00 -$840.95)

Absolute Return if BBY Exercised at $34.00: +0.9%
= +$131.20/$14,440.95
Annualized Return If Exercised (ARIE): +3.7%
= (+$131.20/$14,440.95)*(365/89 days)


3. Cubist Pharmaceuticals (CBST) -- Closed
The transactions history for Cubist Pharmaceuticals(CBST) was as follows:
06/25/2010 Bought 300 CBST @ $21.31
06/25/2010 Sold 3 CBST Jul2010 $22.50 Calls @ $.50
07/17/2010 Jul2010 Options Expired
Note: The closing price of CBST was $21.37 on expiration Friday.
07/22/2010 Sold 3 CBST Aug2010 $22.50 Calls @ $.60
Note: The price of CBST was $21.24 today when this option was sold.
08/21/2010 Aug2010 Options Expired
Note: The closing price of CBST was $22.22 on expiration Friday.
09/01/2010 Sold 3 CBST Sept2010 $22.50 Call Options @ $.60
Note: The price of CBST was $22.48 today when these call options were sold.
09/18/2010 300 shares of CBST were in-the-money and the shares were called away (assigned) at $22.50. Note: The closing price of CBST was $23.53 on expiration Friday.

The overall performance results(including commissions) for the Cubist Pharmaceuticals(CBST) transactions was as follows:
Stock Purchase Cost: $6,401.95
= ($21.31*300+$8.95 commission)

Net Profit:
(a) Options Income: +$476.40
= (300*($.50+$.60+$.60) - 3*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $22.50): +$348.05
= ($22.50-$21.31)*300 - $8.95 commissions

Total Net Profit(Stock assigned at $22.50): +$824.45
= (+$476.40 +$0.00 +$348.05)

Absolute Return (Stock Assigned at $22.50): +12.9%
= +$824.45/$6,401.95
Annualized Return: +55.3%
= (+$824.45/$6,401.95)*(365/85 days)


4. Guess? Inc.(GES) -- Closed
The transactions history for Guess? Inc.(GES) was as follows:
09/07/2010 Bought 300 GES @ $33.79
09/07/2010 Sold 3 GES Sep2010 $35.00 Calls @ $.50
09/18/2010 300 shares of GES were in-the-money and the shares were called away (assigned) at $35.00. Note: The closing price of GES was $38.11 on expiration Friday.

The overall performance results(including commissions) for the Guess? Inc.(GES) transactions was as follows:
Stock Purchase Cost: $10,145.95
= ($33.79*300+$8.95 commission)

Net Profit:
(a) Options Income: +$138.80
= (300*$.50 - $11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation (Stock assigned at $35.00): +$354.05
= ($35.00-$33.79)*300 - $8.95 commissions

Total Net Profit(Stock assigned at $35.00): +$492.85
= (+$138.80 +$0.00 +$354.05)

Absolute Return (Stock Exercised at $35.00): +4.9%
= +$492.85/$10,145.95
Annualized Return: +161.2%
= (+$492.85/$10,145.95)*(365/11 days)


5. Neutral Tandem Inc.(TNDM) -- Closed
The transactions history for Neutral Tandem Inc.(TNDM) was as follows:
07/19/2010 Bought 500 TNDM @ $11.78
07/19/2010 Sold 5 TNDM Aug2010 $12.50 Calls @ $.35
08/21/2010 Aug2010 Option Expired
Note: The closing price of TNDM was $12.09 on expiration Friday.
09/02/2010 Sold 5 TNDM Sep2010 $12.50 Call Options @ $.15
Note: The price of TNDM was $11.61 today when these options were sold.
09/18/2010 500 shares of TNDM were in-the-money and the shares were called away (assigned) at $12.50. Note: The closing price of TNDM was $12.87 on expiration Friday.

The overall performance results(including commissions) for the TNDM transactions was as follows:
Stock Purchase Cost: $5,898.95
= ($11.78*500+$8.95 commission)

Net Profit:
(a) Options Income: +$224.60
= (500*($.35+$.15) - 2*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $12.50): +$351.05
= ($12.50-$11.78)*500 - $8.95 commissions

Total Net Profit(Stock assigned at $12.50): +$575.65
= (+$224.60 +$0.00 +$351.05)

Absolute Return (Stock Assigned at $12.50): +9.8%
= +$575.65/$5,898.95
Annualized Return: +56.5%
= (+$575.65/$5,898.95)*(365/63 days)


6. ProShares UltraShort 20+ Year Treasury ETF (TBT) -- Closed
The transactions history for ProShares UltraShort 20+ Year Treasury ETF (TBT) was as follows:
07/19/2010 Bought 300 TBT @ $35.92
07/19/2010 Sold 3 TBT Aug2010 $38.00 Calls @ $.35
08/21/2010 Aug2010 Option Expired
Note: The closing price of TBT was $31.69 on expiration Friday.
09/02/2010 Sold 3 TBT Sep2010 $33.00 Call Options @ $.55
Note: The price of TBT was $32.04 today when these options were sold.
09/18/2010 300 shares of TBT were in-the-money and the shares were called away (assigned) at $33.00. Note: The closing price of TBT was $33.80 on expiration Friday.

The overall performance results(including commissions) for the TBT transactions were as follows:
Stock Purchase Cost: $10,784.95
= ($35.92*300+$8.95 commission)

Net Profit:
(a) Options Income: +$247.60
= 300*($.35+$.55) - 2*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (TBT assigned at $33.00): -$884.95
= ($33.00-$35.92)*300 - $8.95 commissions

Total Net Profit (TBT assigned at $33.00): -$637.35
= (+$247.60 +$0.00 -$884.95)

Absolute Return (TBT Assigned at $33.00): -5.9%
= -$637.35/$10,784.95
Annualized Return: -35.4%
= (-$637.35/$10,784.95)*(365/61 days)