Monday, October 20, 2014

October 2014 Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained nine positions with October 2014 expirations.  The results for these nine positions so far are as follows:

- Only one of the nine positions (Citigroup Inc.) was closed out at expiration. This was the optimal result for this position in that the maximum potential return-on-investment (ROI) results was achieved from when this Cititgroup October position was established.  The annualized ROI for this closed position is:
Citigroup Inc. = +0.9% absolute return (equivalent to +15.7% annualized return for the 20 day holding period)

The detailed transactions history and result for this Citigroup position is detailed below. The cash available from the closing of this position will be retained in the Covered Calls Advisor Portfolio until new covered calls and/or 100% cash-secured puts positions are established (most likely in the next week or two). These transactions will be posted on this blog the same day they occur.

- Eight of the nine positions (Agnico Eagle Mines, American Airlines, Bidu, Chevron, EMC Corp, Google, Halliburton, and Micron Technology) ended at expiration with the price of the stocks below the strike prices.  So the respective options expired and the long shares were retained in the Covered Calls Advisor Portfolio.  A decision will be made early this week to either sell these shares or to establish a covered calls position by selling Nov2014 call options against the current long stock holdings. When these decisions are made and the accompanying transactions are completed, a post will be made on this blog on the same day along with the detailed transactions to-date for each stock position.

Details of the closed Citigroup transaction and the associated return-on-investment result is as follows:

1.  Citigroup Inc.(C) -- Closed
The transactions were as follows:
09/29/2014 Sold 4 Citigroup Inc. Oct2014 $50.00 Puts @ $.46
Note: The price of Citigroup was $51.69 when this transaction was executed.
10/17/2014 4 Citigroup Puts expired
Note: price of Citi was $50.07 upon Oct2014 expiration

The overall performance result (including commissions) for this Citigroup Inc. transaction was as follows:
100% Cash-Secured Cost Basis: $20,000.00 = $50.00*400
Note:  the price of Citigroup was $51.69 when these Put options were sold.

Net Profit:
(a) Options Income: +$172.05
= ($.46*400 shares) - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Citi stock remained above $50.00 at Oct2014 expiration): +$0.00
= ($50.00-$50.00)*400 shares

Total Net Profit:+$172.05 
= (+$172.05 +$0.00 +$0.00)

Absolute Return: +0.9%
= +$172.05/$20,000.00
Annualized Return (If C above $50.00 at expiration): +15.7%
= (+$172.05/$20,000.00)*(365/20 days)