The initial UNH covered call position expired with the stock out-of-the-money. Today the 300 shares of stock were sold. It was decided not to continue with selling additional call options against the 300 shares owned because the potential annualized return-on-investment available for such a transaction did not exceed this advisor's threshold of >25% annualized return if stock price unchanged (ARIU).
1. United Health Group – Closed
Transactions History:
9/17/07 Bought 300 UNH @ 49.77
9/17/07 Sold 3 Oct07 50 Calls @ 1.50
10/22/07 Sold 300 UNH @ 47.26
Performance Results(including commissions):
Stock Purchase Cost: $14,940.95 ($49.77*300+$9.95 commissions)
Option Income: $437.80 ($1.50*300-$12.20 commissions)
Capital Appreciation: -$772.90 [($47.26*300-$9.95)-$14,940.95]
Net Profit or Loss: -$335.10 ($437.80-$772.90)
ANNUALIZED RETURN ON INVESTMENT:
(-335.10/14,940.95)*(365/35 days) = -23.4%
