January 2017 Option Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained three positions with January 2017 expirations.  Two of the three positions (Alibaba Group Holdings and Agnico Eagle Mines) were closed out at the options expiration this past Friday.  For the other position (AerCap Holdings Inc.), the price of the stock closed at $42.08 (below the $42.50 strike price). So the Put options were assigned and 1,000 shares were purchased at $42.50. The shares will remain in the Covered Calls Advisor Portfolio until they are either sold or a continuation covered calls position is established by selling Feb2017 call options against the shares owned.  The results for each of these three positions are:  

I.  For the two closed positions:
The return-on-investment results for each position was:

• Alibaba Group Holdings = +1.7% absolute return (+7.3% annualized return)
• Agnico Eagle Mines Ltd. = +6.9% absolute return (+39.0% annualized return)

The cash now available in the Covered Calls Advisor Portfolio from the closing of these 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.


Alibaba Group Holdings -- Covered Calls Position Closed at Expiration
The transactions were as follows:
10/26/2016 Sold 4 Alibaba (BABA) Nov2016 $95.00 100% Cash-Secured Put options @ $1.25
11/18/2016 4 BABA Puts assigned and 400 shares of Alibaba purchased at $95.00
11/21/2016 Sold 4 BABA Dec2016 $95.00 Call options @ $2.26
Note: the price of BABA was $94.27 when these Call options were sold
12/16/2016 4 BABA Call options expired worthless
12/29/2016 Sold 4 Jan2017 BABA $92.50 Call options @ $.72 when stock price was $88.05
01/20/2017 4 BABA Call options were in-the-money at the Jan2017 options expiration, so 400 shares of BABA were sold at the $92.50 strike price
Note: the closing price of BABA was $96.06 upon the options expiration

The overall performance result (including commissions) for this BABA position was as follows:
Stock Purchase Cost: $38,007.95
= ($95.00*400+$7.95 commission)

Net Profit:
(a) Options Income: +$1,659.15
= ($1.25 + $2.26 + $.72) * 400 shares - 3*$10.95 commissions
(b) Dividend Income: +$0.00
= ($0.00 dividend per share x 400 shares)

(c) Capital Appreciation (Stock assigned at $92.50 at Jan 20, 2017 expiration): -$1,007.95
+($92.50-$95.00)*500 - $7.95 commissions

Total Net Profit: +$651.20

= (+$1,659.15 options income +$0.00 dividend income -$1,007.95 capital appreciation)

Absolute Return: +1.7%

= +$651.20/$38,007.95

Annualized Return: +7.3%
= (+$1,493.65/$21,507.95)*365/86 days


Agnico Eagle Mines Ltd. -- Covered Calls Position Closed at Expiration
The transactions were as follows:
11/16/2016 Sold 5 Dec2016 $43.00 Puts @ $1.95
Note: The price of Agnico Eagle was $43.93 when this transaction was executed.
12/16/2016 5 Put options exercised and 500 shares AEM purchased at $43.00 strike price.
12/29/2016 Sold 5 Jan2017 AEM $42.50 Call options @ $1.60 when stock price was $42.10
01/20/2017 5 AEM Call options were in-the-money at the Jan2017 options expiration, so 500 shares of Agnico Eagle stock were sold at the $42.50 strike price
Note: the closing price of AEM was $45.64 upon the options expiration

The overall performance result (including commissions) for this AEM position was as follows:
Stock Purchase Cost: $21,507.95
= ($43.00*500+$7.95 commission)

Net Profit:
(a) Options Income: +$1,751.60
= ($1.95 + $1.60)*500 shares - 2*$11.70 commissions
(b) Dividend Income: +$0.00
= ($0.00 dividend per share x 500 shares)

(c) Capital Appreciation (If stock assigned at $42.50 at Jan 20, 2017 expiration): -$257.95
+($42.50-$43.00)*500 - $7.95 commissions

Total Net Profit: +$1,493.65

= (+$1,751.60 options income +$0.00 dividend income -$257.95 capital appreciation)

Absolute Return: +6.9%

= +$1,493.65/$21,507.95

Annualized Return: +39.0%

= (+$1,493.65/$21,507.95)*365/65 days

II. For the one continuing position:
The position that ended at Jan2017 options expiration with the price of the stock below the strike price was AerCap Holdings NV (1,000 shares of AER stock).

This position in AerCap Holdings is included in the listing of the current Covered Calls Advisor Portfolio shown in the right sidebar on this page. For this position, the long shares will remain in the Portfolio until they are either sold or new Covered Calls are established by selling associated Feb2017 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.