October 20th, 2017 Options Expiration Results

The Covered Calls Advisor Portfolio held nine positions with October 20th, 2017 options expirations.   Seven of these positions (Alibaba Group Holding Ltd., Best Buy Inc., Discover Financial Services, JPMorgan Chase & Co., Las Vegas Sands Corp., United States Steel, and Western Digital Corp.) closed in-the-money, so the maximum possible return-on-investment result was achieved for each position:

• Alibaba Group Holding Ltd.:  +1.3% absolute return (+18.4% annualized return) in 26 days
• Best Buy Inc.:  +3.96% absolute return (+27.8% annualized return) in 52 days  
• Discover Financial Services:  +2.5% absolute return (+19.6% annualized return) in 46 days
• JPMorgan Chase & Co.:  +3.2% absolute return (+25.2% annualized return) in 46 days
• Las Vegas Sands Corp.:  +2.6% absolute return (+20.8% annualized return) in 46 days
• United States Steel:  +1.5% absolute return (+54.6% annualized return) in 10 days
• Western Digital Corp.:  +3.6% absolute return (+28.3% annualized return) in 46 days

The cash now available in the Covered Calls Advisor Portfolio from the closing of these seven positions will be retained until new Covered Calls and/or 100% Cash-Secured Puts positions are established.  Any new position(s) established with this available cash will be posted on this site on the same day the transactions occur.  

The remaining two positions (Devon Energy Corp. and Range Resources Corp.) closed yesterday with their stock price below their strike prices, so those shares will remain in the Covered Calls Advisor Portfolio (see holdings in right sidebar) until either the stock is sold or a continuation Covered Calls position is established. 

As an example of how the Return-On-Investment (ROI) results (both Absolute and Annualized ROIs) are calculated, details from the Covered Calls Advisor's Alibaba position are provided below:

Alibaba Group Holding Ltd. (BABA) -- Covered Calls Position Closed on Oct 20th Expiration 

The transactions were as follows:
09/25/2017  Bought 200 Alibaba shares @ $169.05
09/25/2017 Sold 2 BABA October 20, 2017 $160.00 Call options @ $11.15
Note: this was a simultaneous Buy/Write transaction
10/20/2017 200 BABA shares sold at $160.00 strike price upon the Oct 20th options expiration  

The overall performance result (including commissions) was as follows:
Cost Basis: $31,586.29
= ($169.05 -$11.15) * 200 shares + $6.29 commission

Net Profit Components:
(a) Options Income: +$2,230.00
= ($11.15 *200 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (BABA was above $160.00 strike price at Oct 20, 2017 expiration): -$1,814.95
= ($160.00-$169.05)*200 shares - $4.95

Total Net Profit: +$415.05
= (+$2,230.00 options income +$0.00 dividend income -$1,814.95 capital appreciation)

Absolute Return: +1.3%
= +$415.05/$31,586.29
Annualized Return: +18.4%
= (+$415.05/$31,586.29)*(365/26 days)