Monday, February 24, 2014

February 2014 Expiration Results

The Covered Calls Advisor held only one short options position through the February 2014 options expiration.  The result of this position in Citigroup Inc. was an absolute return of +2.3% which is equivalent to a 42.4% annualized return-on-investment for the 20 days that the position was held.   Additional positions will be established this week (including for the two existing long stock positions in Agnico Eagle Mines and Noble Corporation) and will be posted on this blog on the same day the transactions occur.

1. Citigroup Inc. (C)
The transaction was as follows:
02/03/2013 Sold 7 Feb2014 $46.00 Puts @ $1.09
Note: The price of Citigroup was $46.27 when this transaction was executed.
02/21/2014 7 Citigroup short Puts expired.
Note: the price of Citi was $48.26 upon options expiration last Friday.

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

The overall performance result (including commissions) for this Citigroup Inc. transaction was:
100% Cash-Secured Cost Basis: $32,200.00 = $46.00*700
Note:  the price of Citigroup was $46.27 when these Put options were sold.

Net Profit:
(a) Options Income: +$748.80
= ($1.09*700 shares) - $14.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (C remained above $46.00 at Feb2014 expiration): +$0.00
= ($46.00-$46.00)*700 shares

Total Net Profit (C short Put options expired at Feb2014 options expiration):+$748.80 
= (+$748.80 +$0.00 +$0.00)

Absolute Return: +2.3%
= +$748.80/$32,200.00
Annualized Return: +42.4%
= (+$748.80/$32,200.00)*(365/20 days)