During this past month, the Covered Calls Advisor Portfolio held a total of nine Covered Calls positions. All nine positions were closed out at a profit.
The specific results for each position are summarized as follows:
- One Covered Calls position in Global Payments Inc. expired in-the-money (stock price above the strike price) on the November 18th, 2022 monthly options expiration date and was therefore assigned at a +0.9% absolute return in 12 days (equivalent to a +28.8% annualized return-on-investment).
- Four Covered Calls positions expired in-the-money on their respective Weekly options expiration dates during the past month as follows:
- DraftKings Inc. -- +5.4% absolute return-on-investment in 19 days (equivalent to a +103.3% annualized return-on-investment).
- Lowe's Companies Inc. -- +1.6% absolute return-on-investment in 16 days (equivalent to a +36.4% annualized return-on-investment).
- Medtronic PLC -- +1.5% absolute return-on-investment in 46 days (equivalent to a +11.5% annualized return-on-investment).
- Mosaic Company -- +1.5% absolute return-on-investment in 15 days (equivalent to a +35.9% annualized return-on-investment).
- Three Covered Call positions were closed out by early assignment on the day prior to their ex-dividend dates as follows:
- Bank of New York Mellon Corp. -- +1.3% absolute return-on-investment in 8 days (equivalent to a +60.0% annualized return-on-investment).
- Capital One Financial Corporation -- +1.0% absolute return-on-investment in 3 days (equivalent to a +124.0% annualized return-on-investment).
- IBM Corporation -- +0.6% absolute return-on-investment in 9 days (equivalent to a +34.2% annualized return-on-investment).
- One Covered Call position in Cisco Systems Inc. was closed out early based on my decision at the time with a +1.0% absolute return-on-investment in 2 days (equivalent to a +174.1% annualized return-on-investment).
During the past year (last 12 months) 114 of 123 positions (92.7%) in the Covered Calls Advisor Portfolio (CCAP) were closed out at a profit. The Covered Calls Advisor Portfolio weighted average annualized-return-on-investment (aroi) was +20.2% during the past year and the average holding period for these 123 closed positions was 22.6 days. In comparison, the benchmark S&P 500 returned -15.3% during the same prior one-year period.
As demonstrated by these past year's results, the Covered Calls strategy can be extraordinarily beneficial during Bearish time periods such as we have experienced during the past year, and especially by selling moderately in-the-money strike prices to provide added downside protection in bearish markets. However, be advised that these return-on-investment results by the Covered Calls Advisor Portfolio above that of the benchmark S&P 500 (i.e. +20.2% versus -15.3%) substantially exceeds that which would normally be expected over a period of several years using the Covered Calls investing strategy. As indicated in this post made last year on this blog site (Link) -- "by exploiting our Covered Calls investing "edges", we can expect to achieve (over a period of several years) an average annualized-return-on-investment above the S&P 500 benchmark index of at least 3 to 5 percentage points on an annualized-return-on-investment basis".
This Covered Calls Advisor blog is freely available to anyone interested in applying an informed and disciplined Covered Calls investing strategy. As always, I also encourage you to email me at partlow@cox.net any time you would like my feedback on your comments or questions on anything related to Covered Calls.
Best Wishes and Godspeed,
Jeff Partlow
Covered Calls Advisor
partlow@cox.net
