Established Short Put Options Position in Express Scripts Holding Co.

Today, a new position was established in Express Scripts Holding Co.(ticker ESRX) by selling 5 Mar2017 $67.00 Put options.  This position was established when the price of ESRX was $66.64.  These short Puts were chosen since they provide a slightly higher potential return-on-investment result than their comparable Covered Calls.  The Covered Calls Advisor does not use margin, so 100% cash-secured Put options were sold.  There is not a quarterly earnings report or ex-dividend date prior to the Mar2017 options expiration date of March 17th. 

As detailed below, the potential return is +1.1% absolute return in 9 days (equivalent to a +46.2% annualized return-on-investment) if the stock price is unchanged.  If the stock increases above the $67.00 strike price, the maximum possible absolute return of +1.7% (equivalent to a +68.6% annualized return-on-investment) will be achieved.
Note: the Implied Volatility (IV) of the options at the time they were sold was 20.8, so these options exceeded the Covered Calls Advisor's minimum threshold of IV>20 and thus provides a sufficiently attractive potential return-on-investment result for this position.  


Express Scripts Holding Co.(ESRX) -- New 100% Cash-Secured Puts Position

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

Two possible overall performance results (including commissions) for this Express Scripts position is as follows:
Stock Cost Basis: $33,500.00
= $67.00*500 shares

Net Profit:
(a) Options Income: +$566.80
= ($1.15*500 shares) - $8.20 commissions
(b) Dividend Income: +$0.00

(c) Capital Appreciation (If price of ESRX stock closes unchanged at $66.64 at options expiration: -$184.95
=+($66.64-$67.00)*500 shares - $4.95 commission; OR
(c) Capital Appreciation (If price of ESRX stock is above $67.00 strike price at Mar2017 options expiration date): +$0.00
=+($67.00-$67.00)*500 shares

1. Total Net Profit (If ESRX stock is unchanged at $66.64 at Mar2017 expiration): +$381.85

= (+$566.80 options income +$0.00 dividend income -$184.95 capital appreciation)
2. Total Net Profit (If ESRX stock is assigned at $67.00 at Mar2017 expiration): +$566.80
= (+$566.80 options income +$0.00 dividend income +$0.00 capital appreciation)

1. Absolute Return (If ESRX stock is unchanged at $66.64 at Mar2017 expiration): : +1.1%

= +$381.85/$33,500.00

Annualized Return: +46.2%

= (+$381.85/$33,500.00)*(365/9 days)

2. Absolute Return (If ESRX stock is assigned at $67.00 at Mar2017 expiration): : +1.7%

= +$566.80/$33,500.00

Annualized Return: +68.6%

= (+$381.85/$33,500.00)*(365/9 days)