Friday, March 17, 2017

Closed Position in Express Scripts Holding Co.

This morning I was notified that my five short Mar2017 $67.00 Put options in Express Scripts were exercised and I had therefore purchased 500 shares.  Since establishing the position, the stock price has declined rapidly because of negative sentiment towards drug pricing along with a recent downgrade by Wells Fargo to Underperform.

Because of these factors, as well as the Covered Calls Advisor's current Slightly Bearish sentiment on the overall market, this morning I sold the 500 shares at a net loss of $363.15.  Details of the transactions are provided below.  This sale will further increase my already high cash position and I am unlikely to deploy this cash in any new position(s) until I become more constructive on the overall market outlook.

Express Scripts Holding Co.(ESRX) -- Position Closed
The transactions were as follows:
03/09/2017 Sold 5 ESRX Mar2017 $67.00 100% cash-secured Put options @ $1.15

Note: the price of ESRX was $66.64 when these Puts were sold
03/16/2017 5 Put options exercised and 500 ESRX shares purchased at $67.00
03/17/2017 Sold 500 ESRX shares @ $65.14

The overall performance result (including commissions) for this Express Scripts position was as follows:
Stock Cost Basis: $33,504.95
= $67.00*500 shares - $4.95 commission

Net Profit:
(a) Options Income: +$566.80
= ($1.15*500 shares) - $8.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$929.95
=+($65.14 - $67.00)*500 shares - $4.95 commission

Total Net Loss: -$363.15
= (+$566.80 options income +$0.00 dividend income -$929.95 capital appreciation)