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Monday, July 21, 2014

July 2014 Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained one covered calls position in Citigroup Inc. with a July 2014 expiration.  The stock closed in-the-money upon options expiration last Friday, so the 700 shares were called away.   The resulting annualized return-on-investment from this position was +16.1%.

The history of these Citigroup transactions and the associated return-on-investment result are detailed below as follows:

1.  Citigroup Inc. (C) -- Closed
The transactions were as follows:
3/24/2014 Sold 7 Apr2014 $49.00 Puts @ $.89
Note: The price of Citi was $50.03 when this transaction was executed.
4/19/2014 Seven Citigroup Put options expired
Note: The price of Citi was $48.22 upon Apr2014 options expiration
4/22/2014 Sold 7 Citigroup May2014 $49.00 call options at $.62 to establish a covered calls position
Note: The price of Citi was $48.28 when these Call options were sold
5/01/2014 Ex-dividend $7.00 = ($.01*700 shares)
5/16/2014 Seven Citigroup Call options expired
5/22/2014 Sold 7 Citigroup Jun2014 $48.00 Call options at $.49
Note: the price of Citi was $47.10 when these Calls were sold
06/20/2014 Seven Citigroup Call options expired
Note: the price of Citi was $47.34 upon Jun2014 options expiration
07/03/2014 Sold 7 Citigroup Jul2014 $49.00 Call options @ $.60
07/18/2014 7 Call options assigned and 700 Citi shares sold at $49.00 strike price
Note: the price of Citi was $49.56 at Jul2014 expiration

The overall result (including commissions) is as follows:
100% Cash-Secured Cost Basis: $34,300.00
= $49.00*700

Net Profit:
(a) Options Income: +$1,763.20
= ($.89 + $.62+$.49+$.60)*700 shares - 4*$14.20 commissions
(b) Dividend Income: +$7.00
(c) Capital Appreciation: +$0.00
= ($49.00-$49.00)*700 shares
Total Net Profit: +$1,770.20 
= (+$1,763.20 +$7.00 +$0.00)
Absolute Return: +5.2%
= +$1,770.20/$34,300.00
Annualized Return-on-Investment: +16.1%
= (+$1,770.20/$34,300.00)*(365/117 days)