April 20, 2018 Options Expiration Results

The Covered Calls Advisor Portfolio had seven positions with April 20th 2018 options expirations:

• Four positions (Discover Financial Services, iShares China Large-Cap ETF, JPMorgan Chase, and PulteGroup Inc.) closed in-the-money, so the maximum possible return-on-investment result was achieved for each of these positions.
• Three positions (Alibaba Group Holding Ltd, Delta Air Lines Inc., and U.S. Steel Corp.) closed yesterday with their stock price below their strike prices, so those shares will remain in the Covered Calls Advisor Portfolio (see current holdings in right sidebar) until either the stock is sold or continuation Covered Calls positions are established.

So far in 2018, twenty-four of twenty-nine positions (82.8%) were assigned profitably and at an average annualized return-on-investment of +26.8%.  This 82.8% year-to-date result exceeds the Covered Calls Advisor's overall long-term goal of having at least 67% of positions closed out at a profit.  None of the remaining five positions (Alibaba, Blackstone Group, Delta Air Lines, Sinclair Broadcasting, and U.S. Steel) have yet to be closed out, but instead currently remain open as long stock positions.  Most likely, May 18th, 2018 Call options will be sold against each of these five positions in the next few days. 

For the four positions assigned at yesterday's April 20th expiration, the average annualized return-on-investment was +23.5%.  The results for each position was:

• Discover Financial Services:  +1.9% absolute return (+22.0% annualized return) in 31 days
• iShares China Large-Cap ETF:  +2.1% absolute return (+32.6% annualized return) in 23 days 
• JPMorgan Chase:  +2.5% absolute return (+20.1% annualized return) in 45 days
• PulteGroup Inc.:  +1.8% absolute return (+19.4% annualized return) in 33 days

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

To demonstrate how return-on-investment results for a closed Covered Calls position are calculated, the details for one of the four assigned positions is detailed below:

iShares China Large-Cap ETF (FXI) -- Covered Calls Position Closed

The transactions were as follows:
03/29/2018 Bought 600 FXI shares @ $46.86
03/29/2018 Sold 6 FXI Apr 20, 2018 $46.00 Call options @ $1.79
Note: a simultaneous buy/write transaction was executed.
04/20/2018 FXI Calls expired in-the-money, so 600 shares of FXI were sold at $46.00 strike price
Note: the price of FXI shares was $46.42 at expiration

The overall performance result (including commissions) for this iShares China ETF Covered Calls position was as follows:
Stock Purchase Cost: $26,942.97
= ($46.86 - $1.79) *600 shares +$8.97 commission

Net Profit Components:
(a) Options Income: +$1,074.00
= ($1.79*600 shares)
(b) Dividend Income: +$0.00

(c) Capital Appreciation (FXI assigned at Apr 20, 2018 options expiration): -$520.95
=+($46.00-$46.86)*600 - $4.95 commissions

Total Net Profit: +$553.05

= (+$1,074.00 +$0.00 -$520.95)

Absolute Return: +2.1%

= +$553.05/$26,942.97

Annualized Return: +32.6%

= (+$553.05/$26,942.97)*(365/23 days)