The Covered Calls Advisor Portfolio (CCAP) contained five positions with October 2013 expirations. A summary of the results is as follows:
- Three of the five positions (Foot Locker Inc., Marathon Petroleum Corp, and PulteGroup Inc.) were closed out at expiration. This was the optimal result for these three positions in that the maximum potential return-on-investment (ROI) results from when the positions were established were actually achieved. The annualized ROIs for these three closed positions are:
Foot Locker Inc. = +2.5% absolute return (equivalent to +25.4% annualized return for the 37 day holding period)
Marathon Petroleum Corp. = +2.9% absolute return (equivalent to +14.0% annualized return for the 75 day holding period)
PulteGroup Inc. = +3.7% absolute return (equivalent to +22.4% annualized return for the 61 day holding period)
The detailed transactions history and results for each of the three closed positions is detailed below. The cash available from the closing of these positions will be retained in the Covered Calls Advisor Portfolio until new covered calls and/or 100% cash-secured puts positions are established (most likely in the next week or two). These transactions will be posted on this blog the same day they occur.
- Two of the five positions ended at expiration with long stock positions (Noble Corp and ProShares UltraShort 20+ Year Treasury ETF). The seven ProShares UltraShort 20+ Year Treasury ETF 100% cash-secured Puts were assigned at their $74.00 strike price since TBT closed at Oct2013 options expiration last Friday at $73.78, slightly below the $74.00 strike price. The covered calls position in Noble Corp had its options expire since the stock price closed Friday at $37.98, also slightly below the Oct2013 options' $38.00 strike price. So, the Covered Calls Advisor Portfolio (CCAP) now owns 700 long shares in ProShares UltraShort 20+ Year Treasury ETF and 300 long shares in Noble Corp A decision will be made early this week to either sell these shares or to continue with covered calls positions by selling Nov2013 call options against the current long stock holdings. 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 transaction details.
Details of the transactions and associated return-on-investment results for the three closed positions are as follows:
1. Foot Locker Inc.(FL) -- Closed
The transactions were as follows:
09/13/2013 Bought 300 FL shares @ $32.67
09/13/2013 Sold 3 FL Oct2013 $32.00 Call Options @ $1.35
Note: Oct2013 options expiration is 10/18/2013 and next FL ex-dividend of $.20 per share is on 10/16/2013.
= ($32.67*300+$8.95 commission)
(a) Options Income: +$393.80
= ($1.35*300 shares) - $11.20 commissions
(b) Dividend Income (Stock assigned at Oct2013 expiration): +$60.00
= ($.20 dividend per share x 300 shares)