The position in Hewlett Packard (HPQ) was closed today by selling the 500 shares. This decision was made to avoid holding the stock through an earnings release -- which is scheduled for today after the market closes.
Transactions History:
11/28/07 Initial Stock Position -- Bought 500 HPQ @ 49.96
11/28/07 Initial Call Options -- Sold 5 HPQ Dec07 52.5 Calls @ $.55
12/10/07 Ex-Dividend Date -- $.08*500 shares
12/22/07 Dec07 Option Expiration Date – HPQ closed below the strike price at $52.03
12/26/07 Covered Calls Continuation Transaction -- STO 5 Jan08 52.5 Calls @ $1.20
01/19/08 Jan08 Option Expiration Date – HPQ closed below the strike price at $43.75
02/19/08 500 HPQ sold at $44.74
The overall performance results (including commissions) for the HPQ transactions through Feb08 expiration was as follows:
Stock Purchase Cost: $24,989.95
($49.96*500+$9.95 commission)
Net Profit:
(a) Options Income: $847.60 (500*$.55 + 500*$1.20 - 2*$13.70 commissions)
(b) Dividend Income: $40.00 ($.08*500)
(c) Capital Appreciation: -$2,629.90
= ($44.74-$49.96)*500 - 2*$9.95 commissions
Total Net Profit: -$1,742.30
= ($847.60+$40.00-$2,629.90)
HPQ ANNUALIZED ROI: -30.7%
(-$1,742.30/$24,989.95)*(365/83)
