Tuesday, January 24, 2017

AerCap Holdings NV Position Closed

The Jan2017 covered calls position in AerCap Holdings NV (ticker AER) expired upon last Friday's options expiration. Of the three positions in the Covered Calls Advisor Portfolio with Jan2017 expirations, AerCap Holdings was the only one that expired out-of-the-money. The results of the other two positions were presented previously in this post: Jan2017 Options Expiration Results.

Today, the Covered Calls Advisor decided to sell the 1,000 long shares of AER.  The result of this AerCap position was a +1.1% absolute return in 14 days (equivalent to a +27.9% annualized return-on-investment).  The associated transactions and return-on-investment result are detailed below.

AerCap Holdings NV (AER)- Position Closed
The transactions were as follows:
01/10/2017 Sold 10 Jan2017 $42.50 Puts @ $.45
Note: The price of AerCap stock was $43.15 when this transaction was executed.
01/20/2017 10 Puts assigned and 1,000 shares of AER purchased at $42.50 strike price with stock price at $42.08 upon options expiration
01/24/2017 Sold 1,000 shares of AER at $42.52

The overall performance result (including commissions) for this AerCap transaction was:
100% Cash-Secured Cost Basis: $42,500.00 = $42.50 * 1,000 shares

Net Profit:
(a) Options Income: +$434.55
= ($.45*1,000 shares) - $15.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation: +$20.00
= ($42.52 sales price -$42.50 purchase price)*1,000 shares

Total Net Profit:+$454.55 
= (+$434.55 options income +$0.00 dividend income +$20.00 capital appreciation)

Absolute Return: +1.1%
= +$454.55/$42,500.00
Annualized Return: +27.9%
= (+$454.55/$42,500.00)*(365/14 days)