The following transaction was made yesterday to establish a covered calls position against the 200 shares of HUM:
04/28/08 Covered Calls Continuation Transaction -- STO 2 May08 45 Calls @ $2.10
The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 200 HUM @ $68.65
02/20/08 Initial Calls Sold Transaction -- Sold 2 HUM Mar08 70 Calls @ $2.20
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 2 Apr08 50 Calls @ $1.25
Note: Price of HUM was $46.10 when the calls were sold today.
04/19/08 Apr08 Options Expired
04/28/08 Covered Calls Continuation Transaction -- STO 2 May08 45 Calls @ $2.10
Note: Price of HUM was $45.35 when the calls were sold today.
The overall performance results(including commissions)for the HUM transactions through the May08 expiration would be as follows:
Stock Purchase Cost: $13,739.95
($68.65*200+$9.95 commission)
Net Profit:
(a) Options Income: $1,075.65 (200*($2.20+$1.25+$2.10 - 3*$11.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If exercised): -$4,749.90
= ($45.00-$68.65)*200 - 2*$9.95 commissions
Total Net Profit(If stock price exercised): -$3,674.25
= (+$1,075.65+$0-$4,749.90)
Annualized Return If Exercised (ARIE) -112.2%
(-$3,674.25/$13,739.95)*(365/87 days)
Monday, April 28, 2008
Friday, April 25, 2008
Bought McDermott International, Cooper Tire, and EEM Emerging Markets ETF Covered Calls
Three new covered calls positions were established today in the Covered Calls Advisor Portfolio(CCAP) as follows:
1. Established McDermott International Inc (MDR) Covered Calls for May08:
04/28/08 Bought 300 MDR @ $59.16
04/28/08 Sold 3 MDR May08 $60 Calls @ $2.30
Annualized Return If Stock Price Unchanged (ARIU): +64.5%
Annualized Return If Exercised (ARIE): +88.1%
Downside Breakeven Protection: 3.9%
2. Established Cooper Tire (CTB) Covered Calls for May08:
04/28/08 Bought 1000 CTB @ $14.71
04/28/08 Sold 10 CTB May08 $15 Calls @ $.70
Annualized Return If Stock Price Unchanged (ARIU): +78.8%
Annualized Return If Exercised (ARIE): +111.7%
Downside Breakeven Protection: 4.8%
Note: Shortly after establishing this position, Cooper issued news that they will have a miss from their prior quarterly earnings guidance and the stock has declined substantially.
Sometimes our timing is just plain lousy!
3. Established iShares MSCI Emerging Markets ETF (EEM) Covered Calls for May08:
04/28/08 Bought 100 EEM @ $145.30
04/28/08 Sold 1 EEM May08 $140 Call @ $7.90
Annualized Return If Stock Price Unchanged (ARIU): +29.7%
Annualized Return If Exercised (ARIE): +29.7%
Downside Breakeven Protection: 5.4%
1. Established McDermott International Inc (MDR) Covered Calls for May08:
04/28/08 Bought 300 MDR @ $59.16
04/28/08 Sold 3 MDR May08 $60 Calls @ $2.30
Annualized Return If Stock Price Unchanged (ARIU): +64.5%
Annualized Return If Exercised (ARIE): +88.1%
Downside Breakeven Protection: 3.9%
2. Established Cooper Tire (CTB) Covered Calls for May08:
04/28/08 Bought 1000 CTB @ $14.71
04/28/08 Sold 10 CTB May08 $15 Calls @ $.70
Annualized Return If Stock Price Unchanged (ARIU): +78.8%
Annualized Return If Exercised (ARIE): +111.7%
Downside Breakeven Protection: 4.8%
Note: Shortly after establishing this position, Cooper issued news that they will have a miss from their prior quarterly earnings guidance and the stock has declined substantially.
Sometimes our timing is just plain lousy!
3. Established iShares MSCI Emerging Markets ETF (EEM) Covered Calls for May08:
04/28/08 Bought 100 EEM @ $145.30
04/28/08 Sold 1 EEM May08 $140 Call @ $7.90
Annualized Return If Stock Price Unchanged (ARIU): +29.7%
Annualized Return If Exercised (ARIE): +29.7%
Downside Breakeven Protection: 5.4%
Tuesday, April 22, 2008
Buy Microsoft and Bank of New York Mellon
Two new covered call positions were established today in the Covered Calls Advisor Portfolio(CCAP) as follows:
1. Microsoft Covered Calls Established for May08
04/22/08 Bought 1000 MSFT @ $30.02
04/22/08 Sold 10 MSFT May08 $31 Calls @ $.82
Annualized Return If Stock Price Unchanged (ARIU): +39.8%
Annualized Return If Exercised (ARIE): +87.5%
Downside Breakeven Protection: 2.7%
2. Bank of New York Mellon Covered Calls Established for May08
04/22/08 Bought 500 BK @ $40.67
04/22/08 Sold 5 BK May08 $40 Calls @ $2.05
Annualized Return If Stock Price Unchanged (ARIU): +47.6%
Annualized Return If Exercised (ARIE): +47.6%
Downside Breakeven Protection: 5.0%
1. Microsoft Covered Calls Established for May08
04/22/08 Bought 1000 MSFT @ $30.02
04/22/08 Sold 10 MSFT May08 $31 Calls @ $.82
Annualized Return If Stock Price Unchanged (ARIU): +39.8%
Annualized Return If Exercised (ARIE): +87.5%
Downside Breakeven Protection: 2.7%
2. Bank of New York Mellon Covered Calls Established for May08
04/22/08 Bought 500 BK @ $40.67
04/22/08 Sold 5 BK May08 $40 Calls @ $2.05
Annualized Return If Stock Price Unchanged (ARIU): +47.6%
Annualized Return If Exercised (ARIE): +47.6%
Downside Breakeven Protection: 5.0%
Monday, April 21, 2008
Buy Nokia
A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) as follows:
Established Nokia Corp(NOK) Covered Calls for May08
04/21/08 Bought 1000 NOK @ $29.07
04/21/08 Sold 10 NOK May08 $29 Calls @ $1.05
Annualized Return If Stock Price Unchanged (ARIU): +84.9%
Annualized Return If Exercised (ARIE): +84.9%
Downside Breakeven Protection: 6.3%
The annualized returns shown above includes a $.7802 ex-dividend on May 9th.
If the stock moves up and the options are exercised by the owner on 5/8/08 (in order to capture the dividend), then an annualized return of +47.3% will be achieved.
Established Nokia Corp(NOK) Covered Calls for May08
04/21/08 Bought 1000 NOK @ $29.07
04/21/08 Sold 10 NOK May08 $29 Calls @ $1.05
Annualized Return If Stock Price Unchanged (ARIU): +84.9%
Annualized Return If Exercised (ARIE): +84.9%
Downside Breakeven Protection: 6.3%
The annualized returns shown above includes a $.7802 ex-dividend on May 9th.
If the stock moves up and the options are exercised by the owner on 5/8/08 (in order to capture the dividend), then an annualized return of +47.3% will be achieved.
Mylan Labs and Seagate Technology -- Closed
1. Mylan Labs (MYL) -- Closed
The position in Mylan Labs (MYL) was closed today by selling the 800 shares owned.
The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 800 MYL @ $12.85
02/20/08 Initial Calls Sold Transaction -- Sold 8 MYL Mar08 12.5 Calls @ $.75
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 8 Apr08 12.5 Calls @ $.20
Note: Price of MYL was $11.27 when the calls were sold today.
04/19/08 Apr08 Options Expired
04/21/08 Sold 800 MYL at $12.51
The overall performance results(including commissions)for the MYL transactions were as follows:
Stock Purchase Cost: $10,289.95
($12.85*800+$9.95 commission)
Net Profit:
(a) Options Income: +$728.10 (800*$.75 + 800*$.20 - 2*$15.95 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: -$291.90
= ($12.51-$12.85)*800 - 2*$9.95 commissions
Total Net Profit: +$436.20
= ($728.10 + $0 - $291.90)
Annualized Return: +26.2%
(+$436.20/$10,289.95)*(365/59 days)
2. Seagate Technology (STX) -- Closed
The position in Seagate(STX) was closed today by selling the 800 shares owned.
The Transactions History to date is as follows:
12/26/07 Initial Stock Purchase Transaction -- Bought 800 STX @ 25.84
12/26/07 Initial Call Options -- Sold 8 STX Jan08 27.5 Calls @ $.55
01/19/08 Jan08 Options Expiration Date -- STX closed below the strike price
01/30/08 Ex-Dividend Date $.100 * 800 shares = $80 dividend income
02/13/08 Covered Calls Continuation Transaction -- STO 8 Mar08 25 Calls @ $0.45
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 8 Apr08 22.5 Calls @ $.60
Note: The price of STX was $21.70 when the calls were sold on 3/24/08.
04/19/08 Apr08 Options Expired
04/21/08 Sold 800 STX at $19.50
The overall performance results(including commissions)for the STX transactions through the Apr08 expiration would be as follows:
Stock Purchase Cost: $20,681.95
($25.84*800+$9.95 commission)
Net Profit:
(a) Options Income: $1,152.15 (800*$.55 + 800*$.45 +800*$.60 - 3*$15.95 commissions)
(b) Dividend Income: $80.00 ($.100 dividend * 800 shares)
(c) Capital Appreciation: -$5,091.90
= ($19.50 - $25.84)*800 - 2*$9.95 commissions
Total Net Profit: -$3,859.75
= (+$1,152.15 + $80.00 - $5,091.90)
Annualized Return: -58.2%
(-$3,859.75/$20,681.95)*(365/117)
The position in Mylan Labs (MYL) was closed today by selling the 800 shares owned.
The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 800 MYL @ $12.85
02/20/08 Initial Calls Sold Transaction -- Sold 8 MYL Mar08 12.5 Calls @ $.75
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 8 Apr08 12.5 Calls @ $.20
Note: Price of MYL was $11.27 when the calls were sold today.
04/19/08 Apr08 Options Expired
04/21/08 Sold 800 MYL at $12.51
The overall performance results(including commissions)for the MYL transactions were as follows:
Stock Purchase Cost: $10,289.95
($12.85*800+$9.95 commission)
Net Profit:
(a) Options Income: +$728.10 (800*$.75 + 800*$.20 - 2*$15.95 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: -$291.90
= ($12.51-$12.85)*800 - 2*$9.95 commissions
Total Net Profit: +$436.20
= ($728.10 + $0 - $291.90)
Annualized Return: +26.2%
(+$436.20/$10,289.95)*(365/59 days)
2. Seagate Technology (STX) -- Closed
The position in Seagate(STX) was closed today by selling the 800 shares owned.
The Transactions History to date is as follows:
12/26/07 Initial Stock Purchase Transaction -- Bought 800 STX @ 25.84
12/26/07 Initial Call Options -- Sold 8 STX Jan08 27.5 Calls @ $.55
01/19/08 Jan08 Options Expiration Date -- STX closed below the strike price
01/30/08 Ex-Dividend Date $.100 * 800 shares = $80 dividend income
02/13/08 Covered Calls Continuation Transaction -- STO 8 Mar08 25 Calls @ $0.45
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 8 Apr08 22.5 Calls @ $.60
Note: The price of STX was $21.70 when the calls were sold on 3/24/08.
04/19/08 Apr08 Options Expired
04/21/08 Sold 800 STX at $19.50
The overall performance results(including commissions)for the STX transactions through the Apr08 expiration would be as follows:
Stock Purchase Cost: $20,681.95
($25.84*800+$9.95 commission)
Net Profit:
(a) Options Income: $1,152.15 (800*$.55 + 800*$.45 +800*$.60 - 3*$15.95 commissions)
(b) Dividend Income: $80.00 ($.100 dividend * 800 shares)
(c) Capital Appreciation: -$5,091.90
= ($19.50 - $25.84)*800 - 2*$9.95 commissions
Total Net Profit: -$3,859.75
= (+$1,152.15 + $80.00 - $5,091.90)
Annualized Return: -58.2%
(-$3,859.75/$20,681.95)*(365/117)
Boeing and Disney -- Continuation Transactions
1. Boeing (BA) Continuation Transaction
The following transaction was made today to establish a covered calls position against the 200 shares of BA:
04/21/08 Covered Calls Transaction -- STO 2 May08 80 Calls @ $1.75
The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 200 BA @ $84.35
02/20/08 Initial Sold Calls Transaction -- Sold 2 BA Mar08 85 Calls @ $2.40
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 2 Apr08 80 Calls @ $.85
Note: The price of BA was $75.40 when calls were written on 3/24/08.
04/19/08 Apr08 Options Expired
04/21/08 Covered Calls Continuation Transaction -- Sold 2 May08 80 Calls @ $1.75
Note: The price of BA was $78.90 when the calls were written on 4/21/08.
The overall performance results(including commissions)for the BA transactions through the May08 expiration would be as follows:
Stock Purchase Cost: $16,879.95
($84.35*200+$9.95 commission)
Net Profit:
(a) Options Income:+$965.65 (200*$2.40+ 200*$.85+ 200*$1.75- 3*$11.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If stock price unchanged from $78.90): -$1,109.90
= ($78.90-$84.35)*200 - 2*$9.95 commissions
(c) Capital Appreciation (If exercised): -$889.90
= ($80.00-$84.35)*200 - 2*$9.95 commissions
Total Net Profit(If stock price unchanged at $78.90): -$144.25
= ($965.65+$0-$1,109.90)
Total Net Profit(If stock price exercised at $80.00): +$75.75
= ($965.65 +$0 -$889.90)
Annualized Return If Unchanged (ARIU) -3.6%
(-$144.25/$16,879.95)*(365/87 days)
Annualized Return If Exercised (ARIE) +1.9%
(+$75.75/$16,879.95)*(365/87 days)
2. Disney (DIS) Continuation Transaction
The following transaction was made today to establish a covered calls position against the 600 shares of DIS:
04/21/08 Covered Calls Transaction -- STO 6 May08 32.5 Calls @ $.50
The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 600 DIS @ $32.09
02/20/08 Initial Calls Sold Transaction -- Sold 6 DIS Mar08 32.5 Calls @ $.80
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 6 Apr08 32.5 Calls @ $.65
Note: The price of DIS was $31.85 when the calls were written on 3/24/08.
04/19/08 Apr08 Options Expired
04/21/08 Covered Calls Continuation Transaction -- Sold 2 May08 32.5 Calls @ $.50
Note: The price of DIS was $31.35 when the calls were written on 4/21/08.
The overall performance results(including commissions)for the DIS transactions through the May08 expiration would be as follows:
Stock Purchase Cost: $19,263.95
($32.09*600+$9.95 commission)
Net Profit:
(a) Options Income: +$1,126.65 (600*$.80 +600*$.65 +600*$.50 - 3*$14.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If stock price unchanged from $31.35): -$424.10
= ($31.35-$32.09)*600 - 2*$9.95 commissions
(c) Capital Appreciation (If exercised): +$226.10
= ($32.50-$32.09)*600 - 2*$9.95 commissions
Total Net Profit(If stock price unchanged at $31.35): +$702.55
= ($1,126.65 + $0 -$424.10)
Total Net Profit(If stock price exercised at $32.50): +$1,352.75
= ($1,126.65 + $0 +$226.10)
Annualized Return If Unchanged (ARIU) +22.6%
(+$702.55/$19,263.95)*(365/59 days)
Annualized Return If Exercised (ARIE) +43.4%
(+$1,352.75/$19,263.95)*(365/59 days)
The following transaction was made today to establish a covered calls position against the 200 shares of BA:
04/21/08 Covered Calls Transaction -- STO 2 May08 80 Calls @ $1.75
The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 200 BA @ $84.35
02/20/08 Initial Sold Calls Transaction -- Sold 2 BA Mar08 85 Calls @ $2.40
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 2 Apr08 80 Calls @ $.85
Note: The price of BA was $75.40 when calls were written on 3/24/08.
04/19/08 Apr08 Options Expired
04/21/08 Covered Calls Continuation Transaction -- Sold 2 May08 80 Calls @ $1.75
Note: The price of BA was $78.90 when the calls were written on 4/21/08.
The overall performance results(including commissions)for the BA transactions through the May08 expiration would be as follows:
Stock Purchase Cost: $16,879.95
($84.35*200+$9.95 commission)
Net Profit:
(a) Options Income:+$965.65 (200*$2.40+ 200*$.85+ 200*$1.75- 3*$11.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If stock price unchanged from $78.90): -$1,109.90
= ($78.90-$84.35)*200 - 2*$9.95 commissions
(c) Capital Appreciation (If exercised): -$889.90
= ($80.00-$84.35)*200 - 2*$9.95 commissions
Total Net Profit(If stock price unchanged at $78.90): -$144.25
= ($965.65+$0-$1,109.90)
Total Net Profit(If stock price exercised at $80.00): +$75.75
= ($965.65 +$0 -$889.90)
Annualized Return If Unchanged (ARIU) -3.6%
(-$144.25/$16,879.95)*(365/87 days)
Annualized Return If Exercised (ARIE) +1.9%
(+$75.75/$16,879.95)*(365/87 days)
2. Disney (DIS) Continuation Transaction
The following transaction was made today to establish a covered calls position against the 600 shares of DIS:
04/21/08 Covered Calls Transaction -- STO 6 May08 32.5 Calls @ $.50
The Transactions History to date is as follows:
02/20/08 Initial Stock Purchase Transaction -- Bought 600 DIS @ $32.09
02/20/08 Initial Calls Sold Transaction -- Sold 6 DIS Mar08 32.5 Calls @ $.80
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 6 Apr08 32.5 Calls @ $.65
Note: The price of DIS was $31.85 when the calls were written on 3/24/08.
04/19/08 Apr08 Options Expired
04/21/08 Covered Calls Continuation Transaction -- Sold 2 May08 32.5 Calls @ $.50
Note: The price of DIS was $31.35 when the calls were written on 4/21/08.
The overall performance results(including commissions)for the DIS transactions through the May08 expiration would be as follows:
Stock Purchase Cost: $19,263.95
($32.09*600+$9.95 commission)
Net Profit:
(a) Options Income: +$1,126.65 (600*$.80 +600*$.65 +600*$.50 - 3*$14.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If stock price unchanged from $31.35): -$424.10
= ($31.35-$32.09)*600 - 2*$9.95 commissions
(c) Capital Appreciation (If exercised): +$226.10
= ($32.50-$32.09)*600 - 2*$9.95 commissions
Total Net Profit(If stock price unchanged at $31.35): +$702.55
= ($1,126.65 + $0 -$424.10)
Total Net Profit(If stock price exercised at $32.50): +$1,352.75
= ($1,126.65 + $0 +$226.10)
Annualized Return If Unchanged (ARIU) +22.6%
(+$702.55/$19,263.95)*(365/59 days)
Annualized Return If Exercised (ARIE) +43.4%
(+$1,352.75/$19,263.95)*(365/59 days)
Saturday, April 19, 2008
April 2008 Expiration Transactions
The Covered Calls Advisor Portfolio (CCAP) contained a total of 11 positions with April 2008 expirations, with the following results:
- 5 positions (CE,CB,EWY,MSFT, and VZ) closed in-the-money. The calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results for these positions were:
Celanese +46.0%
Chubb +50.4%
iShares MSCI South Korea Index ETF -11.5%
Microsoft +72.2%
Verizon +48.9%
- 6 positions in the CCAP (BA,DIS,FTO,HUM,MYL, and STX) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish May08 covered call positions. The related transactions will be made during the upcoming week and the actual transactions will be posted on this blog site on the same day they occur.
Details for the five exercised positions were as follows:
1. Celanese -- Closed
A covered calls position in CE was established in the CCAP on 02/22/08. The initial covered calls position expired with the stock out-of-the-money (Note: Price of CE was $38.90 at Mar08 expiration) and a continuation transaction was established on 3/24/08. The stock closed in-the-money yesterday:
Transactions History:
02/22/08 Initial Stock Purchase Transaction -- Bought 300 CE @ $40.62
02/22/08 Initial Calls Sold Transaction -- Sold 3 CE Mar08 40 Calls @ $1.95
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 3 Apr08 40 Calls @ $1.70
04/11/08 Ex-Dividend $.04 per share
04/19/08 Options Exercised -- STC 300 CE @ $40.00
[Note: CE stock closed on expiration Friday (4/18/08) at $43.55)]
The overall performance results(including commissions)for the CE transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $12,195.95
($40.62*300+$9.95 commission)
Net Profit:
(a) Options Income: $1,070.60 (300*$1.95 + 300*$1.70 - 2*$12.20 commissions)
(b) Dividend Income: $12.00 (300 * $.04)
(c) Capital Appreciation: -$205.90
= ($40.00-$40.62)*300 - 2*$9.95 commissions
Total Net Profit: +$876.70
= ($1,070.60+$12.00-$205.90)
CE Annualized Return on Investment: +46.0%
(+$876.70/$12,195.95)*(365/57 days)
2. Chubb -- Closed
03/27/08 Initial Stock Purchase Transaction -- Bought 500 CB @ $49.87
03/27/08 Initial Calls Sold Transaction -- Sold 5 CB Apr08 $50 Calls @ $1.55
04/19/08 Options Exercised -- STC 500 CB @ $50.00
[Note: CB stock closed on expiration Friday (4/18/08) at $51.90)]
The overall performance results(including commissions)for the CE transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $24,944.95
($49.87*500+$9.95 commission)
Net Profit:
(a) Options Income: +$747.60 (500*$1.55 - 2*$13.70 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$45.10
= ($50.00-$49.87)*500 - 2*$9.95 commissions
Total Net Profit: +$792.70
= ($747.60+$0+$45.10)
CB Annualized Return on Investment: +50.4%
(+$792.70/$24,944.95)*(365/23 days)
3. iShares MSCI South Korea Index ETF (EWY) -- Closed
The Transactions History to date is as follows:
11/28/07 Initial Stock Purchase Transaction -- Bought 800 EWY @ $65.22
11/28/07 Initial Calls Sold Transaction -- Sold 8 EWY Dec07 68 Calls @ $1.75
12/15/07 Dec07 Options Expiration Date – EWY closed below the strike price
12/24/07 Ex-Dividend Date $.369 * 800 shares
01/25/08 Covered Calls Continuation Transaction -- STO 8 Feb08 62 Calls @ $1.00
02/16/08 Feb08 Expiration Date -- EWY closed below the strike price
02/19/08 Covered Calls Continuation Transaction -- STO 8 Mar08 63 Calls @ $.80
03/22/08 Mar08 Expiration Date -- EWY closed below the strike price
3/24/08 Ex-Dividend Date $.369 * 800 shares
3/24/08 Covered Calls Continuation Transaction -- STO 8 Apr08 57 Calls @ $1.10
Note: Price of EWY was $54.75 when the calls were sold today.
04/19/08 Options Exercised -- STC 800 EWY @ $57.00
[Note: EWY closed on expiration Friday (4/18/08) at $58.59)]
The overall performance results(including commissions)for the EWY transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $52,185.95
($65.22*800+$9.95 commission)
Net Profit:
(a) Options Income: +$3,656.20 [800*($1.75+$1.00+$.80+$1.10) - 4*$15.95 commissions]
(b) Dividend Income: +$590.40 (800*$.369+ 800*$.369)
(c) Capital Appreciation: -$6,595.90
= ($57.00-$65.22)*800 - 2*$9.95 commissions
Total Net Profit: -$2,349.30
= (+$3,656.20 +$590.40 -$6,595.90)
EWY Annualized Return on Investment: -11.5%
(-$2,349.30/$52,185.95)*(365/143 days)
4. Microsoft -- Closed
An APR08 covered calls position in MSFT was established in the CCAP on 03/31/08. The stock closed in-the-money at expiration yesterday and the stock was called away:
03/31/08 Initial Stock Purchase Transaction -- Bought 1000 MSFT @ $28.54
03/27/08 Initial Calls Sold Transaction -- Sold 10 MSFT Apr08 $29 Calls @ $.65
04/19/08 Options Exercised -- STC 1000 MSFT @ $29.00
[Note: MSFT stock closed on expiration Friday (4/18/08) at $30.00)]
The overall performance results(including commissions)for the MSFT transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $28,549.95
($28.54*1000+$9.95 commission)
Net Profit:
(a) Options Income: +$632.55 (1000*$.65 - $17.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$440.10
= ($29.00-$28.54)*1000 - 2*$9.95 commissions
Total Net Profit: +$1,072.65
= (+632.55+$0+$440.10)
MSFT Annualized Return on Investment: +72.2%
(+$1,072.65/$28,549.95)*(365/19 days)
5. Verizon -- Closed
An APR08 covered calls position in VZ was established in the CCAP on 02/20/08. The stock closed in-the-money at expiration yesterday and the stock was called away:
02/20/08 Initial Stock Purchase Transaction -- Bought 300 VZ @ $33.94
02/20/08 Initial Calls Sold Transaction -- Sold 3 VZ Apr08 35 Calls @ $1.30
04/11/08 Ex-Dividend $.43 per share
04/19/08 Options Exercised -- STC 300 VZ @ $35.00
[Note: VZ stock closed on expiration Friday (4/18/08) at $36.03)]
The overall performance results(including commissions)for the VZ transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $10,191.95
($33.94*300+$9.95 commission)
Net Profit:
(a) Options Income: +$377.80 (300*$1.30 - $12.20 commissions)
(b) Dividend Income: +$129.00 (300*$.43)
(c) Capital Appreciation: +$298.10
= ($35.00-$33.94)*300 - 2*$9.95 commissions
Total Net Profit: +$804.90
= (+$377.80+$129.00+$298.10)
VZ Annualized Return on Investment: +48.9%
(+$804.90/$10,191.95)*(365/59 days)
- 5 positions (CE,CB,EWY,MSFT, and VZ) closed in-the-money. The calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results for these positions were:
Celanese +46.0%
Chubb +50.4%
iShares MSCI South Korea Index ETF -11.5%
Microsoft +72.2%
Verizon +48.9%
- 6 positions in the CCAP (BA,DIS,FTO,HUM,MYL, and STX) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish May08 covered call positions. The related transactions will be made during the upcoming week and the actual transactions will be posted on this blog site on the same day they occur.
Details for the five exercised positions were as follows:
1. Celanese -- Closed
A covered calls position in CE was established in the CCAP on 02/22/08. The initial covered calls position expired with the stock out-of-the-money (Note: Price of CE was $38.90 at Mar08 expiration) and a continuation transaction was established on 3/24/08. The stock closed in-the-money yesterday:
Transactions History:
02/22/08 Initial Stock Purchase Transaction -- Bought 300 CE @ $40.62
02/22/08 Initial Calls Sold Transaction -- Sold 3 CE Mar08 40 Calls @ $1.95
03/22/08 Mar08 Options Expired
03/24/08 Covered Calls Continuation Transaction -- Sold 3 Apr08 40 Calls @ $1.70
04/11/08 Ex-Dividend $.04 per share
04/19/08 Options Exercised -- STC 300 CE @ $40.00
[Note: CE stock closed on expiration Friday (4/18/08) at $43.55)]
The overall performance results(including commissions)for the CE transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $12,195.95
($40.62*300+$9.95 commission)
Net Profit:
(a) Options Income: $1,070.60 (300*$1.95 + 300*$1.70 - 2*$12.20 commissions)
(b) Dividend Income: $12.00 (300 * $.04)
(c) Capital Appreciation: -$205.90
= ($40.00-$40.62)*300 - 2*$9.95 commissions
Total Net Profit: +$876.70
= ($1,070.60+$12.00-$205.90)
CE Annualized Return on Investment: +46.0%
(+$876.70/$12,195.95)*(365/57 days)
2. Chubb -- Closed
03/27/08 Initial Stock Purchase Transaction -- Bought 500 CB @ $49.87
03/27/08 Initial Calls Sold Transaction -- Sold 5 CB Apr08 $50 Calls @ $1.55
04/19/08 Options Exercised -- STC 500 CB @ $50.00
[Note: CB stock closed on expiration Friday (4/18/08) at $51.90)]
The overall performance results(including commissions)for the CE transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $24,944.95
($49.87*500+$9.95 commission)
Net Profit:
(a) Options Income: +$747.60 (500*$1.55 - 2*$13.70 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$45.10
= ($50.00-$49.87)*500 - 2*$9.95 commissions
Total Net Profit: +$792.70
= ($747.60+$0+$45.10)
CB Annualized Return on Investment: +50.4%
(+$792.70/$24,944.95)*(365/23 days)
3. iShares MSCI South Korea Index ETF (EWY) -- Closed
The Transactions History to date is as follows:
11/28/07 Initial Stock Purchase Transaction -- Bought 800 EWY @ $65.22
11/28/07 Initial Calls Sold Transaction -- Sold 8 EWY Dec07 68 Calls @ $1.75
12/15/07 Dec07 Options Expiration Date – EWY closed below the strike price
12/24/07 Ex-Dividend Date $.369 * 800 shares
01/25/08 Covered Calls Continuation Transaction -- STO 8 Feb08 62 Calls @ $1.00
02/16/08 Feb08 Expiration Date -- EWY closed below the strike price
02/19/08 Covered Calls Continuation Transaction -- STO 8 Mar08 63 Calls @ $.80
03/22/08 Mar08 Expiration Date -- EWY closed below the strike price
3/24/08 Ex-Dividend Date $.369 * 800 shares
3/24/08 Covered Calls Continuation Transaction -- STO 8 Apr08 57 Calls @ $1.10
Note: Price of EWY was $54.75 when the calls were sold today.
04/19/08 Options Exercised -- STC 800 EWY @ $57.00
[Note: EWY closed on expiration Friday (4/18/08) at $58.59)]
The overall performance results(including commissions)for the EWY transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $52,185.95
($65.22*800+$9.95 commission)
Net Profit:
(a) Options Income: +$3,656.20 [800*($1.75+$1.00+$.80+$1.10) - 4*$15.95 commissions]
(b) Dividend Income: +$590.40 (800*$.369+ 800*$.369)
(c) Capital Appreciation: -$6,595.90
= ($57.00-$65.22)*800 - 2*$9.95 commissions
Total Net Profit: -$2,349.30
= (+$3,656.20 +$590.40 -$6,595.90)
EWY Annualized Return on Investment: -11.5%
(-$2,349.30/$52,185.95)*(365/143 days)
4. Microsoft -- Closed
An APR08 covered calls position in MSFT was established in the CCAP on 03/31/08. The stock closed in-the-money at expiration yesterday and the stock was called away:
03/31/08 Initial Stock Purchase Transaction -- Bought 1000 MSFT @ $28.54
03/27/08 Initial Calls Sold Transaction -- Sold 10 MSFT Apr08 $29 Calls @ $.65
04/19/08 Options Exercised -- STC 1000 MSFT @ $29.00
[Note: MSFT stock closed on expiration Friday (4/18/08) at $30.00)]
The overall performance results(including commissions)for the MSFT transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $28,549.95
($28.54*1000+$9.95 commission)
Net Profit:
(a) Options Income: +$632.55 (1000*$.65 - $17.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation: +$440.10
= ($29.00-$28.54)*1000 - 2*$9.95 commissions
Total Net Profit: +$1,072.65
= (+632.55+$0+$440.10)
MSFT Annualized Return on Investment: +72.2%
(+$1,072.65/$28,549.95)*(365/19 days)
5. Verizon -- Closed
An APR08 covered calls position in VZ was established in the CCAP on 02/20/08. The stock closed in-the-money at expiration yesterday and the stock was called away:
02/20/08 Initial Stock Purchase Transaction -- Bought 300 VZ @ $33.94
02/20/08 Initial Calls Sold Transaction -- Sold 3 VZ Apr08 35 Calls @ $1.30
04/11/08 Ex-Dividend $.43 per share
04/19/08 Options Exercised -- STC 300 VZ @ $35.00
[Note: VZ stock closed on expiration Friday (4/18/08) at $36.03)]
The overall performance results(including commissions)for the VZ transactions through the Apr08 expiration were as follows:
Stock Purchase Cost: $10,191.95
($33.94*300+$9.95 commission)
Net Profit:
(a) Options Income: +$377.80 (300*$1.30 - $12.20 commissions)
(b) Dividend Income: +$129.00 (300*$.43)
(c) Capital Appreciation: +$298.10
= ($35.00-$33.94)*300 - 2*$9.95 commissions
Total Net Profit: +$804.90
= (+$377.80+$129.00+$298.10)
VZ Annualized Return on Investment: +48.9%
(+$804.90/$10,191.95)*(365/59 days)
Tuesday, April 1, 2008
Buy Microsoft
A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) as follows:
Established Microsoft Corporation (MSFT) Covered Calls for Apr08
03/31/08 Bought 1000 MSFT @ $28.54
04/01/08 Sold 10 MSFT Apr08 $29 Calls @ $.65
Annualized Return If Stock Price Unchanged (ARIU): +46.1%
Annualized Return If Exercised (ARIE): +78.9%
Downside Breakeven Protection: 2.3%
Established Microsoft Corporation (MSFT) Covered Calls for Apr08
03/31/08 Bought 1000 MSFT @ $28.54
04/01/08 Sold 10 MSFT Apr08 $29 Calls @ $.65
Annualized Return If Stock Price Unchanged (ARIU): +46.1%
Annualized Return If Exercised (ARIE): +78.9%
Downside Breakeven Protection: 2.3%
Returns -- Through March 2008
One-month, year-to-date, and prior year performance results of the Covered Calls Advisor Portfolio (CCAP) are presented below. In each instance, CCAP results are compared against the benchmark portfolio which is the Schwab MarketTrack Balanced Portfolio (SWBGX).
1. One-Month Result (Mar 2008):
At market close on 03/31/2008, the total Covered Calls Advisor Portfolio (CCAP) value was $242,475.34, a $5,322.26 decrease in the overall portfolio value compared with $247,797.60 at the end of February (02/29/2008).
CCAP March 2008 Absolute Return = -2.1%
($242,475.34-$247,797.60)/$247,797.60
Benchmark Comparison: March 2008 Absolute Return for SWBGX =
-1.3%
($15.75-$15.96)/$15.96
2. 2008 Year-to-Date Results (Jan 1st through Mar 31st, 2008):
CCAP 2008 Year-to-Date Absolute Return = -6.0%
($242,475.34-$257,886.51)/$257,886.51
Benchmark (SWBGX) 2008 Year-to-Date Absolute Return =
-6.2%
($15.75-$16.79)/$16.79
3. Prior Year Results (2007):
The Covered Calls Advisor Portfolio (CCAP) was initiated on September 14th, 2007 with a beginning balance of $250,000. The CCAP balance at year-end (12/31/07) was $257,886.51. Below are the returns of the CCAP for this 2007 timeframe compared with the results of the SWBGX benchmark during the same time period.
CCAP 2007 Absolute Return = +3.2%
($257,886.51-$250,000.00)/$250,000.00
Benchmark (SWBGX) 2007 Absolute Return = +0.7%
($16.79-$16.68)/$16.68
The corresponding annualized return for the 108 days the CCAP existed in 2007 (between Sept 14, 2007 and Dec 31, 2007) was:
CCAP 2007 Annualized Return = +10.7%
[($257,886.51-$250,000.00)/$250,000.00]*(365/108 days)
Benchmark (SWBGX) 2007 Annualized Return = +2.2%
[($16.79-$16.68)/$16.68]*(365/108 days)
This Advisor's Overall Market Meter shows that a NEUTRAL investment posture is appropriate at this time. The corresponding covered calls investing approach is to write near-month primarily at-the-money covered calls.
1. One-Month Result (Mar 2008):
At market close on 03/31/2008, the total Covered Calls Advisor Portfolio (CCAP) value was $242,475.34, a $5,322.26 decrease in the overall portfolio value compared with $247,797.60 at the end of February (02/29/2008).
CCAP March 2008 Absolute Return = -2.1%
($242,475.34-$247,797.60)/$247,797.60
Benchmark Comparison: March 2008 Absolute Return for SWBGX =
-1.3%
($15.75-$15.96)/$15.96
2. 2008 Year-to-Date Results (Jan 1st through Mar 31st, 2008):
CCAP 2008 Year-to-Date Absolute Return = -6.0%
($242,475.34-$257,886.51)/$257,886.51
Benchmark (SWBGX) 2008 Year-to-Date Absolute Return =
-6.2%
($15.75-$16.79)/$16.79
3. Prior Year Results (2007):
The Covered Calls Advisor Portfolio (CCAP) was initiated on September 14th, 2007 with a beginning balance of $250,000. The CCAP balance at year-end (12/31/07) was $257,886.51. Below are the returns of the CCAP for this 2007 timeframe compared with the results of the SWBGX benchmark during the same time period.
CCAP 2007 Absolute Return = +3.2%
($257,886.51-$250,000.00)/$250,000.00
Benchmark (SWBGX) 2007 Absolute Return = +0.7%
($16.79-$16.68)/$16.68
The corresponding annualized return for the 108 days the CCAP existed in 2007 (between Sept 14, 2007 and Dec 31, 2007) was:
CCAP 2007 Annualized Return = +10.7%
[($257,886.51-$250,000.00)/$250,000.00]*(365/108 days)
Benchmark (SWBGX) 2007 Annualized Return = +2.2%
[($16.79-$16.68)/$16.68]*(365/108 days)
This Advisor's Overall Market Meter shows that a NEUTRAL investment posture is appropriate at this time. The corresponding covered calls investing approach is to write near-month primarily at-the-money covered calls.
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