The following transaction was made today to establish a covered calls position against the 600 shares owned in iShares MSCI South Korea Index ETF (EWY):
03/16/09 Sell-to-Open (STO) 6 EWY Mar09 $26s @ $.65
The Transactions History to date is as follows:
12/22/08 Initial Stock Purchase Transaction -- Bought 600 EWY @ $28.50
12/22/08 Inital Calls Sold Transaction -- Sold 6 EWY Jan09 $30.00 Calls @ $1.10
01/17/09 Jan09 Options Expired
01/22/09 Continuation Transaction -- Sell-to-Open (STO) 6 EWY Feb09 $28s @ $1.00
Note: The price of EWY was $25.45 today when the Feb09 options were sold.
02/21/09 Feb09 Options Expired
03/16/09 Sell-to-Open (STO) 6 EWY Mar09 $26s @ $.65
Note: The price of EWY was $25.88 today when the calls were sold.
The overall performance results(including commissions) for the EWY transactions are as follows:
Stock Purchase Cost: $17,108.95
($28.50*600+$8.95 commission)
Net Profit:
(a) Options Income: +$1,609.65 (600*($1.10+$1.00+$.65) - 3*$13.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $25.88): -$1,580.95
= ($25.88-$28.50)*600 - $8.95 commissions
(c) Capital Appreciation (If exercised): -$1,508.95
= ($26.00-$28.50)*600 - $8.95 commissions
Total Net Profit(If stock price unchanged at $25.88): +$28.70
= (+$1,609.65 +$0.00 -$1,580.95)
Total Net Profit(If stock price exercised at $26.00): +$100.70
= (+$1,609.65 +$0.00 -$1,508.95)
Absolute Return if Unchanged: +0.2%
Annualized Return If Stock Price Unchanged (ARIU) +0.7%
(+$28.70/$17,108.95)*(365/89 days)
Absolute Return if Exercised: +0.6%
Annualized Return If Exercised (ARIE) +2.4%
(+$100.70/$17,108.95)*(365/89 days)
