Monday, March 19, 2012

Continuation Transactions -- Halliburton Co., Mylan Inc., and Rio Tinto PLC

Upon Mar2012 options expiration, five of the ten covered calls positions in the Covered Calls Advisor Portfolio (CCAP) expired. Today, a decision was made to re-establish covered calls positions in three stock positions -- Halliburton Co.(HAL), Mylan Inc.(MYL), and Rio Tinto PLC (RIO). The detailed transactions history for these positions as well as possible results are as follows:

1. Halliburton Co.(HAL) -- Continuation
The transactions history is as follows:
03/07/2012 Bought 300 Halliburton Co. Shares @ $34.02
03/08/2012 Sold 3 HAL Mar2012 $35.00 Calls @ $.48
Note: the price of Halliburton was $34.59 today when the calls were sold.
03/18/2012 Mar2012 options expired.
03/19/2012 Sold 3 HAL Apr2012 $35.00 Calls @ $1.18
Note: the price of HAL was $34.90 when these options were sold.

Two possible overall performance results(including commissions) for the Halliburton Co.(HAL)transactions would be as follows:
Stock Purchase Cost: $10,214.95
= ($34.02*300+$8.95 commission)

Net Profit:
(a) Options Income: +$486.80
= ($.48+$1.18)*300 shares - $11.20 commissions
(b) Dividend Income: $0.00
(c) Capital Appreciation (If stock price unchanged at $34.90): +$255.05
+($34.90-$34.02)*300 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $35.00): +$285.05
+($35.00-$34.02)*300 - $8.95 commissions

Total Net Profit(If stock price unchanged at $34.90 at Apr2012 expiration): +$741.85
= (+$486.80 +$0.00 +$255.05)
Total Net Profit(If stock assigned at $35.00 at Apr2012 expiration): +$771.85
= (+$486.80 +$0.00 +$285.05)

1. Absolute Return (If stock price unchanged at Apr2012 expiration): +7.3%
= +$741.85/$10,214.95
Annualized Return (If stock price unchanged at Apr2012 expiration): +57.6%
= (+$741.85/$10,214.95)*(365/46 days)

2. Absolute Return (If stock assigned at $35.00 at Apr2012 expiration): +7.6%
= +$771.85/$10,214.95
Annualized Return (If stock assigned): +60.0%
= (+$771.85/$10,214.95)*(365/46 days)


2. Mylan Inc.(MYL) -- Continuation
The transactions history is as follows:
03/07/2012 Bought 500 Mylan Inc. Shares @ $22.51
03/08/2012 Sold 5 MYL Mar2012 $23.00 Calls @ $.26
Note: the price of Mylan was $22.75 today when the calls were sold.
03/18/2012 Mar2012 options expired.
03/19/2012 Sold 5 MYL Apr2012 $23.00 Calls @ $.47
Note: the price of MYL was $22.73 when these options were sold.

Two possible overall performance results(including commissions) for the Mylan Inc.(MYL) transactions would be as follows:
Stock Purchase Cost: $11,263.95
= ($22.51*500+$8.95 commission)

Net Profit:
(a) Options Income: +$352.30
= ($.26+$.47)*500 shares - $12.70 commissions
(b) Dividend Income: $0.00
(c) Capital Appreciation (If stock price unchanged at $22.73): +$101.05
+($22.73-$22.51)*500 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $23.00): +$236.05
+($23.00-$22.51)*500 - $8.95 commissions

Total Net Profit(If stock price unchanged at Apr2012 expiration): +$453.35
= (+$352.30 +$0.00 +$101.05)
Total Net Profit(If stock assigned at $23.00 at Apr2012 expiration): +$588.35
= (+$352.30 +$0.00 +$236.05)

1. Absolute Return (If stock price unchanged at Apr2012 expiration): +4.0%
= +$453.35/$11,263.95
Annualized Return (If stock price unchanged at Apr2012 expiration): +31.9%
= (+$453.35/$11,263.95)*(365/46 days)

2. Absolute Return (If stock assigned at $23.00 at Apr2012 expiration): +5.2%
= +$588.35/$11,263.95
Annualized Return (If stock assigned): +41.4%
= (+$588.35/$11,263.95)*(365/46 days)


3. Rio Tinto PLC (RIO) -- Continuation
The transactions history is as follows:
02/21/2012 Bought 300 RIO @ $58.24
02/21/2012 Sold 3 RIO Mar2012 $57.50 Calls @ $1.80
02/29/2012 Ex-Dividend $273.00 = $.91 * 300 shares
03/18/2012 Mar2012 options expired.
03/19/2012 Sold 3 RIO Apr2012 $57.50 Calls @ $1.75
Note: the price of RIO was $57.30 when these options were sold.

Two possible overall performance results(including commissions) for the Rio Tinto PLC ADR (RIO) transactions would be as follows:
Stock Purchase Cost: $17,480.95
= ($58.24*300+$8.95 commission)

Net Profit:
(a) Options Income: +$1,053.80
= ($1.80+$1.75)*300 shares - $11.20 commissions
(b) Dividend Income: +$273.00
= $.91 per share x 300 shares
(c) Capital Appreciation (If stock price unchanged at $57.30 at Apr2012 expiration):
-$290.95 = +($57.30-$58.24)*300 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $57.50): -$230.95
+($57.50-$58.24)*300 - $8.95 commissions

Total Net Profit(If stock price unchanged at $57.30 at Apr2012 expiration): +$1,035.85
= (+$1,053.80 +$273.00 -$290.95)
Total Net Profit(If stock assigned at $57.50 at Apr2012 expiration): +$1,095.85
= (+$1,053.80 +$273.00 -$230.95)

1. Absolute Return (If stock price unchanged at $57.30 at Apr2012 expiration): +5.9%
= +$1,035.85/$17,480.95
Annualized Return (If stock assigned at Apr2012 expiration): +35.5%
= (+$1,035.85/$17,480.95)*(365/61 days)

2. Absolute Return (If stock assigned at Apr2012 expiration): +6.3%
= +$1,095.85/$17,480.95
Annualized Return (If stock assigned at Apr2012 expiration): +37.5%
= (+$1,095.85/$17,480.95)*(365/61 days)

No comments:

Post a Comment