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Wednesday, March 27, 2013

Established Teva Pharmaceutical Industries Covered Calls Position

Today, a new covered calls position was established in Teva Pharmaceutical Industries Ltd (Ticker Symbol TEVA) with an April 2013 options expiration as follows:

Teva Pharmaceutical Industries Ltd (TEVA) -- New Covered Calls Position
The transactions were as follows:
3/27/2013 Bought 300 TEVA shares @ $39.70
3/27/2013 Sold 3 TEVA Apr2013 $40.00 Call Options @ $.64
Note: The price of TEVA was $39.77 when the options were sold

A possible overall performance result (including commissions) for this Teva Pharmaceutical Industries Ltd  covered calls position is as follows:
Stock Purchase Cost: $11,918.95
= ($39.70*300+$8.95 commission)

Net Profit:
(a) Options Income: +$180.80
= 300*$.64 - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If TEVA price unchanged at $39.70): -$8.95
= ($39.70-$39.70)*300 - $8.95 commissions
(c) Capital Appreciation (If TEVA assigned at $40.00): +$81.05 = ($40.00-$39.70)*300 - $8.95 commissions

Total Net Profit (If TEVA price unchanged at $39.70): +$171.85
= (+$180.80 +$0.00 -$8.95)
Total Net Profit (If TEVA assigned at $40.00): +$261.85 = (+$180.80 +$0.00 +$81.05)

Absolute Return if Price Unchanged at $39.70: +1.4%
= +$171.85/$11,918.95
Annualized Return if Price Unchanged at $39.70: +21.1%
= (+$171.85/$11,918.95)*(365/25 days)

Absolute Return if Assigned (at $40.00): +2.2% = +$261.85/$11,918.95
Annualized Return If Assigned (ARIA): +32.1%
= (+$261.85/$11,918.95)*(365/25 days)

Wednesday, March 20, 2013

Establish Covered Calls -- iShares MSCI China ETF, MetLife, and Potash Corp.

Today, new covered calls positions were established in iShares MSCI China ETF (ticker FXI), MetLife (ticker MET), and Potash Corp.(ticker POT).  The options expiration dates are April for FXI and POT and May for MET.  The details are as follows:

1. iShares MSCI China ETF (FXI) -- New Covered Call Position
The transactions were as follows:
3/20/2013 Bought 1,000 FXI shares @ $37.20
3/20/2013 Sold 10 FXI Apr2013 $37.50 Call Options @ $.69
Note: the price of FXI was $37.20 when the options were sold.

A possible overall performance result (including commissions) for these iShares MSCI China ETF covered calls is as follows:
Stock Purchase Cost: $37,208.95
= ($37.20*1,000+$8.95 commission)

Net Profit:
(a) Options Income: +$673.55
= 1,000*$.69 - $16.45 ommissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If FXI assigned at $37.50) = +$291.05
= ($37.50-$37.20)*1,000 - $8.95 commissions

Total Net Profit (If FXI assigned at $37.50): +$964.60
= (+$673.55 +$0.00 +$291.05)

Absolute Return if Assigned (at $37.50): +2.6%
= +$964.60/$37,208.95
Annualized Return If Assigned (ARIA): +30.5%
= (+$1,595.35/$45,394.95)*(365/31 days)


2. MetLife Inc. (MET) -- New Covered Call Position
The transactions were as follows:
03/20/2013 Bought 300 MET shares @ $38.92
3/20/2013 Sold 3 MET May2013 $39.00 Call Options @ $1.51
Note: the price of MET was $38.92 when the options were sold.

A possible overall performance result (including commissions) for these MetLife Inc. (MET)  covered calls is as follows:
Stock Purchase Cost: $11,684.95
= ($38.92*300+$8.95 commission)

Net Profit:
(a) Options Income: +$441.80
= 300*$1.51 - $11.20 commissions
(b) Dividend Income: +$55.50 = ($.185 * 300 shares).  Ex-div date is May 4th
(c) Capital Appreciation (If MET assigned at $39.00) = +$15.05
= ($39.00-$38.92)*300 - $8.95 commissions

Total Net Profit (If MET assigned at $39.00): +$512.35
= (+$441.80 +$55.50 +$15.05)

Absolute Return if Assigned (at $39.00): +4.4%
= +$512.35/$11,684.95
Annualized Return If Assigned (ARIA): +27.1%
= (+$512.35/$11,684.95)*(365/59 days)


3. Potash Corp. of Saskatchewan Inc. (POT) -- New Covered Call Position
The transactions were as follows:
03/20/2013 Bought 300 POT shares @ $39.978
3/20/2013 Sold 3 POT Apr2013 $40.00 Call Options @ $.79
Note: the price of POT was $39.978 when the options were sold.

A possible overall performance result (including commissions) for these Potash Corp. of Saskatchewan Inc. (POT) covered calls is as follows:
Stock Purchase Cost: $12,002.35
= ($39.978*300+$8.95 commission)

Net Profit:
(a) Options Income: +$225.80
= 300*$.79 - $11.20 ommissions
(b) Dividend Income: +$84.00 = ($.28 * 300 shares). Ex-div date is April 9th
(c) Capital Appreciation (If POT assigned at $40.00) = -$2.35
= ($40.00-$39.978)*300 - $8.95 commissions

Total Net Profit (If POT assigned at $40.00): $307.45
= (+$225.80 +$84.00 -$2.35)


Absolute Return if Assigned (at $40.00): +2.6% = +$307.45/$12,002.35
Annualized Return If Assigned (ARIA): +30.2%
= (+$307.45/$12,002.35)*(365/31 days)