I. For the three closed positions:
The overall average annualized return-on-investment for these three closed positions was +22.5%. The return-on-investment results for each position was:
- Amazon.com Inc. = +1.1% absolute return (+23.0% annualized return)
- Blackstone Group LP = +2.3% absolute return (+21.2% annualized return)
- Noble Energy Inc. = +1.8% absolute return (+23.2% annualized return)
Below are two examples that demonstrate how the returns shown above are calculated. The Blackstone Group LP position details are provided to show calculations for a Covered Calls position and Amazon.com Inc. details an example for a 100% Cash-Secured Put position.
The cash now available in the Covered Calls Advisor Portfolio from the closing of these three 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.
Blackstone Group LP -- Example of Covered Calls Position Closed at Expiration
The transactions were as follows:
11/08/2016 Bought 1,000 Blackstone shares @ $23.59
11/08/2016 Sold 10 BX Dec2016 $23.00 Call options @ $1.14
Note: this was a simultaneous buy/write transaction.
12/16/2016 10 Call options expired in-the-money and 1,000 BX shares were sold at the $23 strike price.
The overall performance result (including commissions) was as follows:
Bought 1,000 shares BX: $23,597.95
= $23.59*1,000 + $7.95 commission
Net Profit:
(a) Options Income: +$1,132.50
= ($1.14*1,000 shares) - $7.50 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (BX was above $23.00 strike price at Dec2016 expiration): -$597.95
= ($23.00-$23.59)*1,000 shares - $7.95 commissions
Total Net Profit: +$534.55
= (+$1,132.50 options income +$0.00 dividends -$597.95 capital appreciation)
Absolute Return: +2.3%
= +$534.55/$23,597.95
Annualized Return: +21.2%
= (+$534.55/$23,597.95)*(365/39 days)
Amazon.com Inc. -- Example of 100% Cash-Secured Put Position Closed at Expiration
The transaction was as follows:
11/29/2016 Sold 1 Dec2016 $750.00 Put @ $8.60
Note: The price of Amazon.com stock was $769.70 when this transaction was executed.
12/16/2016 The AMZN Dec2016 $750 Put expired with the stock price above the strike price upon options expiration.
The Covered Calls Advisor does not use margin, so the detailed information on this position and the results shown below reflect the fact that this position was established using 100% cash securitization for the Put option sold.
The overall performance result (including commissions) for this Amazon.com transaction was as follows:
100% Cash-Secured Cost Basis: $75,000.00 = $750.00 * 100 shares
Net Profit:
(a) Options Income: +$851.30
= ($8.60*100 shares) - $8.70 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (AMZN stock closed above $750.00 at Dec2016 expiration): +$0.00
= ($750.00-$750.00)*100 shares
Total Net Profit:+$851.30
= (+$851.30 +$0.00 +$0.00)
Absolute Return: +1.1%
= +$851.30/$75,000.00
Annualized Return: +23.0%
= (+$851.30/$75,000.00)*(365/18 days)
II. For the two continuing positions:
The two positions that ended at Dec2016 options expiration with the price of the stock below the strike price were Agnico Eagle Mines (500 shares) and Alibaba Group (400 shares).
These positions are included in the listing of the current Covered Calls Advisor Portfolio shown in the right sidebar on this page. For these 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 Jan2017 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.
