This past Friday was expiration Friday for March. In this Covered Calls Advisor blog's most recent post, it was noted that of the twelve covered calls positions for March 2009, five were exercised and the stock was called away. The remaining seven March09 positions expired out-of-the-money. It was decided to retain the stocks of each of these seven companies (CHL,FLR,GE,HPQ,JCOM,POT, and SOHU) and to establish April09 covered calls for each one. The current fundamental value of each company was reviewed and in each case was deemed worthy to continue to be held in the Covered Calls Advisor Portfolio (CCAP). The transactions history to date and the profit potential for each of these companies is detailed below.
1. China Mobile LTD ADR (CHL) -- Continuation Transaction
The following transaction was made today to establish a covered calls position against the 200 shares owned in China Mobile (CHL):
03/23/09 Sell-to-Open (STO) 2 CHL Apr09 $45s @ $1.35
The Transactions History to date is as follows:
03/13/09 Initial Stock Purchase Transaction -- Bought 200 CHL @ $44.15
03/13/09 Inital Calls Sold Transaction -- Sold 2 CHL Mar09 $45.00 Calls @ $1.00
03/21/09 Mar09 Options Expired
03/23/09 Continuation Transaction -- Sell-to-Open (STO) 2 CHL Apr $45s @ $1.35
Note: The price of CHL was $43.16 today when the call options were sold.
The overall performance results(including commissions) for the CHL transactions are as follows:
Stock Purchase Cost: $8,838.95
($44.15*200+$8.95 commission)
Net Profit:
(a) Options Income: +$449.10 (200*($1.00+$1.35) - 2*$10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $43.16): -$206.95
= ($43.16-$44.15)*200 - $8.95 commissions
(c) Capital Appreciation (If exercised at $45.00): +$161.05
= ($45.00-$44.15)*200 - $8.95 commissions
Total Net Profit(If stock price unchanged at $43.16): +$242.15
= (+$449.10 +$0.00 -$206.95)
Total Net Profit(If stock price exercised at $45.00): +$610.15
= (+$449.10 +$0.00 +$161.05)
Absolute Return if Stock Price Unchanged at $43.16: +2.7%
= +$242.15/$8,838.95
Annualized Return If Stock Price Unchanged (ARIU) +27.8%
(+$242.15/$8,838.95)*(365/36 days)
Absolute Return if Exercised at $45.00: +6.9%
= +$610.15/$8,838.95
Annualized Return If Exercised (ARIE) +70.0%
(+$610.15/$8,838.95)*(365/36 days)
2. Fluor Corp (FLR) -- Continuation Transaction
The following transaction was made today to establish a covered calls position against the 600 shares owned in Fluor Corp(FLR):
03/23/09 Sell-to-Open (STO) 6 FLR Apr09 $40s @ $1.45
The transactions history to date is as follows:
11/24/08 Initial Stock Purchase Transaction -- Bought 600 FLR @ $35.35
11/24/08 Initial Calls Sold Transaction -- Sold 6 FLR Dec08 $35 Calls @ $3.50
12/03/08 Ex-Dividend of $75.00 ($.125*600 shares)
12/05/08 Roll-Up-And-Out Transaction:
Bought to Close 6 FLR Dec08 $35 Calls @ $10.10
Sold to Open 6 FLR Jan09 $45 Calls @ $5.30
01/17/09 Jan09 Options Expired
01/28/09 Continuation Transaction -- Sell-to-Open (STO) 6 FLR Feb09 $45s @ $2.10
Note: The price of FLR was $43.35 when the calls were sold.
02/21/09 Feb09 Options Expired
03/04/09 Ex-Dividend of $75.00 ($.125*600 shares)
03/09/09 Sell-to-Open (STO) 6 FLR Mar09 $40s @ $.65
Note: The price of FLR was $37.04 today when the calls were sold.
03/21/09 Mar09 Options Expired
03/23/09 Continuation Transaction -- Sell-to-Open (STO) 6 FLR Apr $40s @ $1.45
Note: The price of FLR was $37.05 today when the call options were sold.
The overall performance results(including commissions) for the FLR transactions are as follows:
Stock Purchase Cost: $21,218.95
($35.35*600+$8.95 commission)
Net Profit:
(a) Options Income: +$1,672.75 (600*($3.50-$10.10+$5.30+$2.10+$.65+$1.45) - 5*$13.45 commissions)
(b) Dividend Income: +$150.00 ($.125*600 shares)* 2 distributions
(c) Capital Appreciation (If stock price unchanged at $37.05): +$1,011.05
= ($37.05-$35.35)*600 - $8.95 commissions
(c) Capital Appreciation (If exercised at $40.00): +$2,781.05
= ($40.00-$35.35)*600 - $8.95 commissions
Total Net Profit(If stock price unchanged at $37.05): +$2,833.80
= (+$1,672.75 +$150.00 +$1,011.05)
Total Net Profit(If stock price exercised at $40.00): +$4,603.80
= (+$1,672.75 +$150.00 +$2,781.05)
Absolute Return if Unchanged at $37.05: +13.4%
= +$2,833.80/$21,218.95
Annualized Return If Unchanged (ARIU): +33.6%
= (+$2,833.80/$21,218.95)*(365/145 days)
Absolute Return if Exercised at $40.00: +21.7%
= +$4,603.80/$21,218.95
Annualized Return If Exercised (ARIE) +54.6%
(+$4,603.80/$21,218.95)*(365/145 days)
3. General Electric (GE) -- Continuation Transaction
The following transaction was made today to establish a covered calls position against the 1000 shares owned in General Electric (GE):
03/23/09 Sell-to-Open (STO) 10 GE Apr09 $10s @ $.99
The Transactions History to date is as follows:
02/23/09 Initial Stock Purchase Transaction -- Bought 1000 GE @ $8.96
02/23/09 Inital Calls Sold Transaction -- Sold 10 GE Mar09 $10.00 Calls @ $.63
03/21/09 Mar09 Options Expired
03/23/09 Continuation Transaction -- Sell-to-Open (STO) 10 GE Apr $10s @ $.99
Note: The price of GE was $10.09 today when the call options were sold.
The overall performance results(including commissions) for the GE transactions are as follows:
Stock Purchase Cost: $8,968.95
($8.96*1000+$8.95 commission)
Net Profit:
(a) Options Income: +$1,587.10
= (1000*($.63+$.99) - 2*$16.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If exercised at $10.00): +$1,031.05
= ($10.00-$8.96)*1000 - $8.95 commissions
Total Net Profit(If stock price exercised at $10.00): +$2,618.15
= (+$1,587.10 +$0.00 +$1,031.05)
Absolute Return if Exercised at $10.00: +29.2%
= +$2,618.15/$8,968.95
Annualized Return If Exercised (ARIE) +197.3%
(+$2,618.15/$8,968.95)*(365/54 days)
4. Hewlett-Packard Company (HPQ) -- Continuation Transaction
The following transaction was made today to establish a covered calls position against the 600 shares owned in Hewlett-Packard Company (HPQ):
03/23/09 Sell-to-Open (STO) 6 HPQ Apr09 $32.50s @ $.55
The transactions history to date is as follows:
01/20/09 Bought 300 HPQ @ $33.89
01/20/09 Sold 3 HPQ Feb09 $37.50 Calls @ $.80
02/21/09 Feb09 Options Expired
02/25/09 Bought 300 HPQ @ $29.79
02/25/09 Sell-to-Open (STO) 6 HPQ Mar09 $32.50s @ $.55
03/09/09 $48.00 Ex-dividend ($.08 * 600 shares)
03/21/09 Mar09 Options Expired
03/23/09 Continuation Transaction -- Sell-to-Open (STO) 6 HPQ Apr $32.50s @ $.55
Note: The price of HPQ was $30.24 today when the call options were sold.
The overall performance results(including commissions) for the HPQ transactions are as follows:
Stock Purchase Cost: $19,121.90
($33.89*300+$29.79*300+2*$8.95 commission)
Net Profit:
(a) Options Income: +$861.90 = (300*$.80 + 600*($.55 +$.55) - $38.10 commissions)
(b) Dividend Income: +$48.00
(c) Capital Appreciation (If stock price unchanged at $30.24): -$968.95
= [$30.24-$31.84(avg cost basis)]*600 - $8.95 commissions
(c) Capital Appreciation (If exercised at $32.50): +$387.05
= [$32.50-$31.84(avg cost basis)]*600 - $8.95 commissions
Total Net Profit(If stock price unchanged at $30.24): -$59.05
= (+$861.90 +$48.00 -$968.95)
Total Net Profit(If stock price exercised at $32.50): +$1,296.95
= (+$861.90 +$48.00 +$387.05)
Absolute Return if Stock Price Unchanged at $30.24: -0.3%
=-$59.05/$19,121.90
Annualized Return If Unchanged (ARIU): -1.6%
=(-$59.05/$19,121.90)*(365/(88+52)/2 days)
Absolute Return if Exercised at $32.50: +6.8%
=+$1,296.95/$19,121.90
Annualized Return If Exercised (ARIE) +35.4%
=(+$1,296.95/$19,121.90)*(365/(88+52)/2 days)
5. j2 Global Communications Inc (JCOM) -- Continuation Transaction
The following transaction was made to establish a covered calls position against the 300 shares owned in j2 Global Communications Inc (JCOM):
03/23/09 Sell-to-Open (STO) 3 JCOM Apr09 $20s @ $.90
The transactions history to date is as follows:
01/23/09 Initial Stock Purchase Transaction -- Bought 300 JCOM @ $16.76
01/23/09 Inital Calls Sold Transaction -- Sold 3 JCOM Feb09 $17.50 Calls @ $1.00
Roll-Up Spread Transaction:
02/03/09 Buy-to-Close (BTC) 3 JCOM Feb09 $17.5s @ $2.76
02/03/09 Sell-to-Open (STO) 3 JCOM Feb09 $20s @ $1.06
Note: The price of JCOM was $19.90 today when this transaction was executed.
02/21/09 Feb09 Options Expired
02/25/09 Sell-to-Open (STO) 3 JCOM Mar09 $20s @ $.75
Note: JCOM stock was priced at $19.37 today when the calls were sold.
03/21/09 Mar09 Options Expired
03/23/09 Continuation Transaction -- Sell-to-Open (STO) 3 JCOM Apr $20s @ $.90
Note: The price of JCOM was $19.75 today when the call options were sold.
The overall performance results(including commissions) for the JCOM transactions through the Apr09 expiration would be as follows:
Stock Purchase Cost: $5,036.95
($16.76*300+$8.95 commission)
Net Profit:
(a) Options Income: +$240.20 (300*($1.00-$2.76+$1.06+$.75+$.90) - 4*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If unchanged at $19.75): +$888.05
= ($19.75-$16.76)*300 - $8.95 commissions
(c) Capital Appreciation (If exercised at $20.00): +$963.05
= ($20.00-$16.76)*300 - $8.95 commissions
Total Net Profit(If stock price unchanged at $19.75): +$1,128.25
= (+$240.20 +$0.00 +$888.05)
Total Net Profit(If stock price exercised at $20.00): +$1,203.25
= (+$240.20 +$0.00 +$963.05)
Absolute Return (If Stock Price Unchanged at $19.75) = +22.4%
= +$1,128.25/$5,036.95
Annualized Return If Unchanged (ARIU) +96.2%
= (+$1,128.25/$5,036.95)*(365/85 days)
Absolute Return If Exercised at $20.00 = +23.9%
+$1,203.25/$5,036.95
Annualized Return If Exercised (ARIE) +102.6%
(+$1,203.25/$5,036.95)*(365/85 days)
6. Potash Corp of Saskatchewan Inc (POT) -- Continuation Transaction
The following transaction was made today to establish a covered calls position against the 100 shares owned in Potash Corp (POT):
03/23/09 Sell-to-Open (STO) 1 POT Apr09 $80s @ $6.00
The Transactions History to date is as follows:
03/02/09 Initial Stock Purchase Transaction -- Bought 100 POT @ $79.078
03/02/09 Inital Calls Sold Transaction -- Sold 1 POT Mar09 $80.00 Call @ $6.30
03/21/09 Mar09 Options Expired
03/23/09 Continuation Transaction -- Sell-to-Open (STO) 1 POT Apr $80s @ $6.00
Note: The price of POT was $79.85 today when the call option was sold.
The overall performance results(including commissions) for the POT transactions are as follows:
Stock Purchase Cost: $7,916.75
($79.078*100+$8.95 commission)
Net Profit:
(a) Options Income: +$1,210.60 (100*($6.30+$6.00) - 2*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $79.85): +$68.25
= ($79.85-$79.078)*100 - $8.95 commissions
(c) Capital Appreciation (If exercised at $80.00): +$83.25
= ($80.00-$79.078)*100 - $8.95 commissions
Total Net Profit(If stock price unchanged at $79.85): +$1,278.85
= (+$1,210.60 +$0.00 +$68.25)
Total Net Profit(If stock price exercised at $80.00): +$1,293.85
= (+$1,210.60 +$0.00 +$83.25)
Absolute Return if Stock Price Unchanged at $79.85: +16.2%
= +$1,278.85/$7,916.75
Annualized Return If Stock Price Unchanged (ARIU) +125.4%
(+$1,278.85/$7,916.75)*(365/47 days)
Absolute Return if Exercised at $80.00: +16.3%
= +$1,293.85/$7,916.75
Annualized Return If Exercised (ARIE) +126.9%
(+$1,293.85/$7,916.75)*(365/47 days)
7. Sohu.com Inc (SOHU) -- Continuation Transaction
The following transaction was made today to establish a covered calls position against the 400 shares owned in Sohu.com Inc (SOHU):
03/23/09 Sell-to-Open (STO) 4 SOHU Apr09 $45s @ $1.45
The Transactions History to date is as follows:
02/24/09 Bought 400 SOHU @ $44.617
02/24/09 Sold 4 SOHU Mar09 $45.00 Calls @ $3.20
03/21/09 Mar09 Options Expired
03/23/09 Continuation Transaction -- Sell-to-Open (STO) 4 SOHU Apr $45s @ $1.45
Note: The price of SOHU was $40.10 today when the call options were sold.
The overall performance results(including commissions) for the SOHU transactions are as follows:
Stock Purchase Cost: $17,855.75
($44.617*400+$8.95 commission)
Net Profit:
(a) Options Income: +$1,839.10 (400*($3.20+$1.45) - 2*$10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $40.10): -$1,815.75
= ($40.10-$44.617)*400 - $8.95 commissions
(c) Capital Appreciation (If exercised at $45.00): +$144.25
= ($45.00-$44.617)*400 - $8.95 commissions
Total Net Profit(If stock price unchanged at $40.10): +$23.35
= (+$1,839.10 +$0.00 -$1,815.75)
Total Net Profit(If stock price exercised at $45.00): +$1,983.35
= (+$1,839.10 +$0.00 +$144.25)
Absolute Return if Stock Price Unchanged at $40.10: +0.1%
= +$23.35/$17,855.75
Annualized Return If Stock Price Unchanged (ARIU) +0.9%
(+$23.35/$17,855.75)*(365/53 days)
Absolute Return if Exercised at $45.00: +6.9%
= +$1,983.35/$17,855.75
Annualized Return If Exercised (ARIE) +76.5%
(+$1,983.35/$17,855.75)*(365/53 days)
