Sunday, December 19, 2010

December 2010 Expiration Transactions

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

- Decisions were made earlier this month to roll out five covered calls positions (iShares MSCI South Korea ETF, Microsoft, International Paper, Bank of America, and iShares MSCI China ETF) into Jan2011 positions. Separate posts were made on this blog earlier this month for each of these transactions on the day they occurred.

Of the remaining six positions that were held until Dec2010 expiration this past Friday:

- Two positions (Intel Corp. and Oshkosh Corp.) finished in-the-money. The calls were exercised and the shares were called away. The annualized return-on-investment results achieved on these assigned positions were as follows:

1. Intel Corp. -- +42.7%

2. Oshkosh Corp. -- +56.5%

Detailed results for these two covered calls positions that were assigned (called away) upon Dec2010 expiration are described below.

- The remaining four positions in the CCAP (Domtar Corp., iShares MSCI Emerging Markets ETF, Petrobras, and Research in Motion) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Jan2011 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.

The overall performance results for the two assigned Dec2010 covered calls positions were as follows:

1. Intel Corp.(INTC) -- Closed
The transactions history to date for Intel Corp.(INTC) is as follows:
10/20/2010 Bought 300 INTC @ $19.45
10/20/2010 Sold 3 INTC Nov2010 $20.00 Call Options @ $.21
11/03/2010 Ex-Dividend of $47.25 = ($.1575 * 300 shares)
11/16/2010 Buy-to-Close (BTC) 3 INTC Nov2010 $20.00 Call Options @ $1.03
11/16/2010 Sell-to-Open (STO) 3 INTC Dec2010 $21.00 Call Options @ $.60
12/18/2010 Dec2010 Options Expired
Note: The closing price of INTC was $21.46 on expiration Friday.

The overall performance result(including commissions) for these INTC transactions was as follows:
Stock Purchase Cost: $5,843.95
= ($19.45*300+$8.95 commission)

Net Profit:
(a) Options Income: -$99.60
= 300*($.21-$1.03+$.60) - 3*$11.20 commissions
(b) Dividend Income: +$47.25 = ($.1575*300 shares) ex-div on 11/3/2010
(c) Capital Appreciation (Stock assigned at $21.00): +$456.05
= ($21.00-$19.45)*300 - $8.95 commissions

Total Net Profit(Stock assigned at $21.00): +$403.70
= (-$99.60 +$47.25 +$456.05)

Absolute Return (Stock Assigned at $21.00): +6.9%
= +$403.70/$5,843.95
Annualized Return: +42.7%
= (+$403.70/$5,843.95)*(365/59 days)

2. Oshkosh Corp.(OSK) -- Closed
The transactions history to date for Oshkosh Corp.(OSK) is as follows:
09/27/2010 Bought 300 OSK @ $26.46
09/27/2010 Sold 3 OSK Oct2010 $27.00 Calls @ $.80
10/08/2010 Buy-to-Close (BTC) 3 OSK Oct2010 $27.00 Call Options @ $3.10
10/08/2010 Sell-to-Open (STO) 3 OSK Nov2010 $30.00 Call Options @ $1.70
11/20/2010 Nov2010 Options Expired
Note: The closing price of OSK was $29.16 on expiration Friday.
11/26/2010 Sold 3 IP Dec2010 $30.00 Calls @ $.70
Note: The price of IP was $29.33 when the call options were sold.
12/18/2010 Dec2010 Options Expired
Note: The closing price of OSK was $34.42 on expiration Friday.

The overall performance result(including commissions) for the Oshkosh Corp.(OSK) transactions was as follows:
Stock Purchase Cost: $7,946.95
= ($26.46*300+$8.95 commission)

Net Profit:
(a) Options Income: -$44.80
= (300*($.80-$3.10+$1.70+$.70) - 4*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $30.00): +$1,053.05
= ($30.00-$26.46)*300 - $8.95 commissions

Total Net Profit(Stock assigned at $30.00): +$1,008.25
= (-$44.80 +$0.00 +$1,053.05)

Absolute Return (Stock Assigned at $30.00): +12.7%
= +$1,008.25/$7,946.95
Annualized Return If Assigned (ARIA): +56.5%
= (+$1,008.25/$7,946.95)*(365/82 days)

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