Established 100% Cash-Secured Puts -- Fusion-io Inc.

Today, the Covered Calls Advisor established a 100% Cash-Secured Puts position in Fusion-io Inc. (Ticker Symbol FIO) with a May2014 expiration and at the $9.00 strike price.  As detailed below, this investment will provide a +2.0% absolute return in 20 days (which is equivalent to a +36.7% annualized return) if Fusion-io stock price is unchanged at the same price of $8.40 on the May 16th options expiration date.  The maximum potential return for this investment is if the stock closes above $9.00 at options expiration.  In this case, the absolute return would be +8.7% (which is equivalent ot a +158.4% annualized return) for this 20 day investment.

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

Details of this transaction along with some potential return-on-investment results are: 

1.  Fusion-io Inc.
The transaction was as follows:
04/28/2014 Sold 7 Fusion-io Inc. (FIO) May2014 $9.00 Put Options @ $.80
Note: the price of FIO was $8.40 when these Puts were sold.

Two possible overall performance results(including commissions) for this FIO transaction would be as follows:
100% Cash-Secured Cost Basis: $6,300.00
= $9.00*700

Net Profit:
(a) Options Income: +$546.80
= ($.80*700 shares) - $13.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If FIO remains unchanged at $8.40 price upon May2014 expiration): -$420.00
= ($8.40-$9.00)*700 shares
(c) Capital Appreciation (If FIO closes above $9.00 strike price upon May2014 expiration):
+$0.00 = ($9.00-$9.00)*700 shares

Total Net Profit (If FIO remains unchanged at $8.40 price upon May2014 expiration): +$126.80  = (+$546.80 +$0.00 -$420.00)
Total Net Profit (If FIO is above $9.00 strike price at May2014 options expiration): +$546.80 = (+$546.80 +$0.00 +$0.00)

1. Absolute Return (If FIO remains unchanged at $8.40 price at May2014 options expiration and Put options thus expire worthless): +2.0%
= +$126.80/$6,300.00
Annualized Return (If stock price unchanged at $8.40 at expiration): +36.7%
= (+$126.80/$6,300.00)*(365/20 days); OR

2. Absolute Return (If FIO stock price is above $9.00 upon May2014 expiration and Put options thus expire worthless): +8.7%
= +$546.80/$6,300.00
Annualized Return (If stock price above $9.00 at expiration): +158.4%
= (+$546.80/$6,300.00)*(365/20 days)