Friday, May 16, 2014
Established a 100% Cash-Secured Puts Position in Ensco PLC Class A
Details of this transaction along with a potential return-on-investment result are:
Ensco PLC Class A (ESV)
The transaction is as follows:
05/16/2014 Sold 4 Jun2014 $50.00 Puts @ $1.70
Note: The price of Ensco was $49.82 when this transaction was executed.
The Covered Calls Advisor does not use margin, so the detailed information on this position and some potential results shown below reflect the fact that this position was established using 100% cash securitization for the four Put options sold.
A possible overall performance result (including commissions) for this Ensco transaction would be as follows:
100% Cash-Secured Cost Basis: $20,000.00 = $50.00*400
Note: the price of Ensco was $49.82 when these Put options were sold.
(a) Options Income: +$668.05
= ($1.70*400 shares) - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If ESV price remains unchanged at $49.82 at Jun2014 expiration): -$72.00
= ($49.82-$50.00)*400 shares
Total Net Profit (If ESV is unchanged at $49.82 at Jun2014 options expiration):+$596.05
= (+$668.05 +$0.00 -$72.00)
Absolute Return (If ESV is $49.82 at Jun2014 options expiration and Put options thus expire worthless): +3.0%
Annualized Return (If ESV is at current price of $49.82 at expiration): +29.4%
= (+$596.05/$20,000.00)*(365/37 days)