August 2nd, 2024 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions with August 2nd, 2024 weekly options expiration dates.  Both positions (Dell Technologies Inc. and KraneShares CSI China Internet ETF (KWEB) closed well out-of-the-money.   For Dell, the stock has declined precipitously and yesterday afternoon I unwound the position by selling to close the 200 shares and simultaneously buying-to-close the 2 Call options.  For KWEB, I allowed the Calls to expire and the 1,000 shares to remain in the Covered Calls Advisor Portfolio.  I will decide early next week whether to sell these KWEB shares or to continue this Covered Calls position by selling Calls against the shares.  As always, I will make a post on this blog on the same day that I make a transaction with this KWEB position.  

I also owned a Covered Calls position in Delta Airlines Inc. with an August 9th options expiration date and which I also decided to close out yesterday afternoon.  Both Dell and Delta were losing positions and their detailed transactions and results are as follows:

1. Dell Technologies Inc. (DELL) -- Covered Calls Position Closed Out
The original buy/write transaction was:
7/16/2024 Bought 200 Dell Technologies Inc. shares @ $134.00
7/16/2024 Sold 2 DELL 8/2/2024 $130.00 Call options @ $7.30 per share.
7/23/2024 Ex-dividend of $.445 per share.
8/2/2024 Unwound this DELL Covered Calls position by selling-to-close the 200 shares @ $102.56 per share and buying-to-close the 2 8/2/2024 $130.00 Calls at $.04 per share.

The overall performance result (including commissions) for this Dell Covered Calls position is as follows:
Covered Calls Net Investment: $25,341.34
= ($134.00 - $7.30) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$1,458.66
= ($7.30 * 200 shares) - $1.34 commission
(b) Dividend Income:  +$89.00
= ($.445 dividends per share x 200 shares)
(c) Capital Appreciation: -$6,288.00

= ($102.56 stock selling price - $134.00 stock purchase price) x 200 shares

Total Net Loss: -$4,740.34

= (+$1,458.66 options income +$89.00 dividend income -$6,288.00 capital appreciation)

Absolute Return-on-Investment: -18.7%

= (-$4,740.34/$25,341.34)

Equivalent Annualized Return-on-Investment: -401.6%

= (-$4,740.34/$25,341.34) * (365/17 days)

2.Delta Air Lines Inc. (DAL) -- Covered Calls Position Closed Out
The original buy/write transaction was:
7/22/2024 Bought 400 Delta Air Lines Inc. shares @ $44.15.
7/22/2024 Sold 4 Delta 8/9/2024 $43.00 Call options @ $1.81 per share.
7/30/2024 Upcoming quarterly ex-dividend of $.15 per share.
8/2/2024 Unwound this Delta Covered Calls position by selling-to-close the 400 shares @ $39.84 per share and buying-to-close the 4 8/9/2024 $43.00 Calls at $.09 per share.

The overall performance results (including commissions) for this Delta Air Lines Inc. Covered Calls position are as follows:
Covered Calls Net Investment: $16,938.68
= ($44.15 - $1.81) * 400 shares + $2.68 commission

Net Profit Components:
(a) Options Income: +$721.32
= ($1.81 * 400 shares) - $2.68 commission
(b) Dividend Income: +$60.00
= ($.15 dividend per share x 400 shares
(c) Capital Appreciation: -$1,724.00
= ($39.84 stock selling price - $44.15 stock purchase price) x 400 shares

Total Net Profit: -$942.68

= (+$721.32 options income +$60.00 dividend income -$1,724.00 capital appreciation)

Absolute Return-on-Investment: -5.6%

= -$942.68/$16,938.68

Annualized Return-on-Investment: -112.9%

= (-$942.68/$16,938.68) * (365/18 days)

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net