I. For the five closed positions:
The overall average annualized return-on-investment for these five closed positions was +26.3%. The return-on-investment results for each position was:
- Alibaba Group Holding Ltd = +0.8% absolute return (+36.6% annualized return)
- Apple Inc. = +1.0% absolute return (+19.9% annualized return)
- Celgene Corp. = +1.8% absolute return (+22.2% annualized return)
- Deutsche Bank AG = +2.0% absolute return (+18.9% annualized return)
- JetBlu Airways Corp. = +1.7% absolute return (+33.9% annualized return)
Below are two examples that demonstrate how the returns shown above are calculated. The Apple Inc. details are provided to show calculations for a Covered Calls position and the Alibaba Group Holding Ltd details are an example for a 100% Cash-Secured Puts position.
The cash now available in the Covered Calls Advisor Portfolio from the closing of these five positions will be retained until new covered calls and/or 100% cash-secured puts positions are established. Any new positions established in the near future with this available cash will be posted on this site on the same day the transactions occur.
Apple Inc. -- Example of Covered Calls Position Closed at Expiration
The transactions were as follows:
11/01/2016 Bought 300 Apple Inc. shares @ $112.56
11/01/2016 Sold 3 AAPL Nov2016 $110.00 Call options @ $3.13
Note: this was a simultaneous buy/write transaction.
11/18/2016 Apple covered calls postion closed
Note: the price of AAPL was $110.04 at Nov2016 options expiration.
The overall performance result (including commissions) was as follows:
Bought 300 shares AAPL: $33,775.95
= $112.56*300 + $7.95 commission
Net Profit:
(a) Options Income: +$936.75
= ($3.13*300 shares) - $2.25 commissions
(b) Dividend Income: +$171.00 = $.57 * 300 shares
(c) Capital Appreciation (AAPL closed above $110.00 strike price at Nov2016 expiration): -$775.95
= ($110.00-$112.56)*300 shares - $7.95 commissions
Total Net Profit (AAPL closed above $110.00 strike price at Nov2016 options expiration): +$331.80
= (+$936.75 options income +$171.00 dividends -$775.95 capital appreciation)
Absolute Return: +1.0%
= +$331.80/$33,775.95
Annualized Return: +19.9%
= (+$331.80/$33,775.95)*(365/18 days)
Alibaba -- Example of 100% Cash-Secured Puts Position Closed at Expiration
The transaction was as follows:
11/11/2016 Sold 2 BABA 100% cash-secured $90.00 Put options with Nov2016 expirations @ $.77
Note: the price of Alibaba was $92.74 today when this transaction was executed.
11/18/2016 Alibaba Puts expired with price of stock above the $90 strike price
Note: the price of BABA was $93.39 at Nov2016 options expiration.
The performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $18,000.00
= $90.00*200
Net Profit:
(a) Options Income: +$144.55
= ($.77 * 200 shares) - $9.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (BABA closed above $90.00 strike price at Nov2016 expiration): +$0.00
= ($90.00 -$90.00)*200 shares
Total Net Profit: +$144.55
= (+$144.55 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +0.8%
= +$144.55/$18,000.00
Annualized Return: +36.6%
= (+$144.55/$18,000.00)*(365/8 days)
II. For the four continuing positions:
The four positions that ended at Nov2016 options expiration with the price of the stock below the strike price were Agnico Eagle Mines (500 shares), Alibaba Group (400 shares), Facebook (300 shares), and Hanes Brands (1,000 shares).
These positions are included in the listing of the current Covered Calls Advisor Portfolio shown in the right sidebar on this page. For each of these four positions, the options expired and the long shares will remain in the Portfolio until they are either sold or new Covered Calls are established by selling associated Dec2016 options against the stock currently held. In either case, transactions and overall position results will be posted on this site on the same day they occur.
