Monday, April 23, 2012

April 2012 Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained twelve positions with April 2012 expirations. A summary of the results were as follows:
- Eleven positions (Apple Inc., Goldcorp, Halliburton, Hess Corporation, iShares MSCI China ETF, iShares MSCI Emerging Markets ETF, Hartford Financial Servies Group, Market Vectors Russia Index ETF, Morgan Stanley, Mylan Inc., and Rio Tinto Ltd.) expired out-of-the-money. Decisions will be made to either sell these equities, or to keep them and sell calls to establish May 2012 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.

- One position (Potash Corp.) was a short cash-secured-puts position that was in-the-money upon options expiration, so the options expired worthless and the position is closed. The detailed transactions history and result for this Potash position is as follows:

1. Potash Corp. of Saskatchewan Inc.(POT) -- Closed
The transaction history is as follows:
03/14/2012 Sold 3 Potash Corp (POT) Apr2012 $42.50 Put Options @ $1.62
Note: the price of POT was $42.58 today when these Puts were sold.
04/22/2012 3 POT Put options expired worthless.
Note: the price of POT was $43.93 upon options expiration.

The Covered Calls Advisor does not use margin, so the detailed information on this position and some potential results shown below reflect the fact that this position was established using 100% cash securitization for the three Put options sold.

The overall performance result(including commissions) for this Potash Corp (POT) transaction was as follows:
100% Cash-Secured Cost Basis: $12,750.00
= $42.50*300

Net Profit:
(a) Options Income: +$474.80
= ($1.62*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (POT above $42.50 at Apr2012 expiration): +$0.00
= ($42.50-$42.50)*300

Total Net Profit (POT above $42.50 at Apr2012 options expiration): +$474.80
= (+$474.80 +$0.00 +$0.00)

Absolute Return (POT above $42.50 at Apr2012 options expiration and Put options thus expire worthless): +3.7%
= +$474.80/$12,750.00
Annualized Return: +34.9%
= (+$474.80/$12,750.00)*(365/39 days)