The following transaction was made today to establish a covered calls position against the 300 shares already owned in Amgen Inc (AMGN):
04/24/09 Sell-to-Open (STO) 3 AMGN May09 $50s @ $1.05
The Transactions History to date is as follows:
03/23/09 Initial Stock Purchase Transaction -- Bought 300 AMGN @ $48.95
03/23/09 Inital Calls Sold Transaction -- Sold 3 AMGN Apr09 $50.00 Calls @ $1.70
04/18/09 Apr09 Options Expired
04/24/09 Continuation Transaction -- Sell-to-Open (STO) 3 AMGN May09 $50s @ $1.05
Note: The price of AMGN was $48.95 today when the call options were sold.
The overall performance results(including commissions) for the AMGN transactions would be as follows:
Stock Purchase Cost: $14,693.95
($48.95*300+$8.95 commission)
Net Profit:
(a) Options Income: +$802.60 [300*($1.70+$1.05) - 2*$11.20 commissions]
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $48.95): -$8.95
= ($48.95-$48.95)*300 - $8.95 commissions
(c) Capital Appreciation (If exercised at $50.00): +$306.05
= ($50.00-$48.95)*300 - $8.95 commissions
Total Net Profit(If stock price unchanged at $48.95): +$793.65
= (+$802.60 +$0.00 -$8.95)
Total Net Profit(If stock price exercised at $50.00): +$1,108.65
= (+$802.60 +$0.00 +$306.05)
Absolute Return if Stock Price Unchanged at $48.95: +5.4%
= +$793.65/$14,693.95
Annualized Return If Stock Price Unchanged (ARIU) +37.2%
(+$793.65/$14,693.95)*(365/53 days)
Absolute Return if Exercised at $45.00: +7.5%
= +$1,108.65/$14,693.95
Annualized Return If Exercised (ARIE) +52.0%
(+$1,108.65/$14,693.95)*(365/53 days)
