Saturday, October 20, 2012

October 2012 Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained six covered calls positions with October 2012 expirations. A summary of the results is as follows:

- Two positions (Apple Inc. and iShares MSCI South Korea ETF) had their options expire yesterday since the stock prices closed below the Oct2012 options' strike prices.  So now, the Covered Calls Advisor Portfolio (CCAP) is long 100 shares of Apple Inc. (AAPL) and 500 shares of iShares MSCI South Korea ETF (EWY).  A decision will be made by Monday to either sell these shares or to re-establish covered calls positions by selling Nov2012 call options.  When these decisions are made and the accompanying transactions are completed, a post will be made on this blog on the same day with the details.

- The other four positions (Citigroup Inc. Halliburton Co., iShares MSCI China ETF, and MetLife Inc.) were closed out upon Oct2012 options expiration. The options expired and the accompanying equities were assigned (i.e. equities called away) at their respective strike prices.  
With the cash available from the closing of these positions, the Covered Calls Advisor will establish new positions this week with Nov2012 options expirations and will post them on this blog the same day they occur.

The annualized return-on-investment financial results for these four closed positions are:
Citigroup Inc. = +33.6%
Halliburton Co. = +34.4%
iShares MSCI China ETF = +20.0%
MetLife Inc. = +22.3%


The detailed transactions history and results for these four closed positions are as follows:

1. Citigroup Inc. (C) -- Closed
The transactions history was as follows:
9/26/2012 Sold 10 Citigroup, Inc. (C) Oct2012 $31.00 Put Options @ $.73
Note: the price of Citi stock was $32.12 today when these Puts were sold.
10/19/2012 Citigroup Oct2012 Options expired
Note: the price of Citi was $37.16 upon options expiration.

The overall performance result (including commissions) for this Citigroup, Inc.(C) transaction was as follows:
100% Cash-Secured Cost Basis: $31,000.00
= $31.00*1,000

Net Profit:
(a) Options Income: +$713.75
= ($.73*1,000 shares) - $16.25 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Citigroup stock closed at $37.16, well above the $31.00 strike price at Oct2012 expiration): +$0.00
= ($31.00-$31.00) -$0.00 commissions

Total Net Profit: +$713.75
= (+$713.75 options income +$0.00 dividends +$0.00 capital appreciation)

Absolute Return: +2.3%
= +$713.75/$31,000.00
Annualized Return: +33.6%
= (+$713.75/$31,000.00)*(365/25 days)


2. Halliburton Co.(HAL) -- Closed 
The transactions history was as follows:
09/26/2012 Bought 700 HAL shares @ $33.819
09/26/2012 Sold 7 HAL Oct2012 $33.00 Call Options @ $1.65
Note: the price of HAL shares was $33.85 today when these options were sold.
10/19/2012 HAL Oct2012 Options expired
Note: the price of Halliburton stock was $34.98 upon options expiration.

The overall performance result (including commissions) for this Halliburton Co. (HAL) covered calls position was as follows: Stock Purchase Cost: $23,682.25
= ($33.819*700+$8.95 commission)

Net Profit:
(a) Options Income: +$1,140.80
= ($1.65 X 700 shares) - $14.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (HAL assigned at $33.00 upon expiration): -$582.25
=+($33.00-$33.819)*700 - $8.95 commissions

Total Net Profit: +$558.55
= (+$1,140.80 +$0.00 -$582.25)

Absolute Return (HAL assigned at $33.00 at Oct2012 expiration): +2.4%
= +$558.55/$23,682.25
Annualized Return: +34.4%
= (+$558.55/$23,682.25)*(365/25 days)


3. iShares MSCI China ETF (FXI) -- Closed
The transaction history for this iShares MSCI China ETF (FXI) position was as follows:
07/30/2012 Bought 1,000 FXI shares @ $34.09
07/30/2012 Sold 10 FXI Aug2012 $34.00 Call Options @ $.80
08/17/2012 Bought-to-Close 10 FXI Aug2012 $34.00 Calls at $.42
08/17/2012 Sold-to-Open 10 FXI August 24th, 2012 $34.50 call options at $.31
Note: the price of FXI was $34.41 today when this roll-up-and-out transaction occurred.
08/24/2012 10 FXI Aug 24th $34.50 call options expired.
Note: the price of FXI was $34.01 today when these options expired.
08/28/2012 Sold-to-Open 10 FXI Sep2012 $34.00 Calls @ $.56
Note: the price of FXI was $33.62 today when this transaction was made.
09/21/2012 Bought-to-Close 10 FXI Sep2012 $34.00 Call Options at $.90
09/21/2012 Sell-to-Open 10 FXI Oct2012 $34.00 Call Options at $1.35
Note: the price of FXI was $34.88 when this transaction was made.
10/19/2012 FXI Oct2012 Options expired
Note: the price of FXI was $37.13 upon options expiration.

The overall performance result (including commissions) for this iShares MSCI China ETF (FXI) covered calls position was as follows:
Stock Purchase Cost: $34,098.95
= ($34.09*1,000+$8.95 commission)

Net Profit:
(a) Options Income: +$1,535.25
=($.80-$.42+$.31+$.56-$.90+$1.35)*1,000 shares - 4*$16.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (FXI assigned at $34.00 upon expiration): -$98.95
=($34.00-$34.09)*1,000 - $8.95 commissions

Absolute Return (FXI assigned at $34.00 at Oct2012 options expiration): +4.5%
= +$1,535.25/$34,098.95
Annualized Return: +20.0%
= (+$1,535.25/$34,098.95)*(365/82 days) The transactions are as follows:


4. MetLife Inc. (MET) -- Closed
The transaction history for this MetLife Inc. position was as follows:
09/26/2012 Bought 600 MET shares @ $33.80 09/26/2012 Sold 6 MET Oct2012 $33.00 Call Options @ $1.47
Note: the price of MET shares was $33.81 today when these options were sold.
10/19/2012 MET Oct2012 Options expired
Note: the price of MET was $35.93 upon options expiration.

The overall performance result (including commissions) for this MetLife Inc. (MET) covered calls position was as follows:
Stock Purchase Cost: $20,288.95
= ($33.80*600+$8.95 commission)

Net Profit:
(a) Options Income: +$868.55
= ($1.47 X 600 shares) - $13.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (MET assigned at $33.00 upon expiration): -$488.95
=+($33.00-$33.80)*600 - $8.95 commissions

Total Net Profit (MET assigned at $33.00 at Oct2012 expiration): +$310.00
= (+$868.55 +$0.00 -$558.55)

Absolute Return (MET assigned at $33.00 at Oct2012 expiration): +1.5%
= +$310.00/$20,288.95
Annualized Return: +22.3%
= (+$310.00/$20,288.95)*(365/25 days)