Today, the Covered Calls Advisor Portfolio(CCAP) established a covered calls position in Aspen Insurance Holdings Inc.(AHL) by selling three Mar2010 options against the 300 shares owned in Aspen Insurance Holdings Inc. as follows:
01/21/2010 Sell-to-Open (STO) 3 AHL Mar2010 $30.00s @ $.35
The transactions history to date is as follows:
10/20/09 Bought 300 AHL @ $28.20
10/20/09 Sold 3 AHL Nov09 $30.00 Calls @ $.35
11/06/09 Ex-Dividend $45.00 = $.15*300 shares
11/21/09 Nov09 Options Expired
01/21/2010 Sell-to-Open (STO) 3 AHL Mar2010 $30.00s @ $.35
Note: The price of AHL was $27.78 when this call option sale was transacted
02/10/2010 Ex-Dividend $45.00 = $.15*300 shares
Some potential profit profiles for the continuation covered calls position in AHL are as follows:
Stock Purchase Cost: $8,468.95
= ($28.20*300+$8.95 commission)
Net Profit:
(a) Options Income: +$187.60
= (300*($.35+$.35) - 2*$11.20 commissions)
(b) Dividend Income: +$90.00 = 2*$.15*300 shares
(c) Capital Appreciation(If stock price unchanged at $27.78): -$134.95
= ($27.78-$28.20)*300 - $8.95 commissions
(c) Capital Appreciation (If stock exercised at $30.00): +$531.05
= ($30.00-$28.20)*300 - $8.95 commissions
Total Net Profit(If stock price unchanged at $27.78): +$61.65
= (+$187.60 +$90.00 -$134.95)
Total Net Profit(If stock exercised at $30.00): +$808.65
= (+$187.60 +$90.00 +$531.05)
Absolute Return if Stock Price Unchanged at $27.78: +0.7%
= +$61.65/$8,468.95
Annualized Return If Unchanged (ARIU): +1.8%
= (+$61.65/$8,468.95)*(365/151 days)
Absolute Return if Stock Exercised at $30.00: +9.5%
= +$808.65/$8,468.95
Annualized Return If Exercised (ARIE): +23.1%
= (+$808.65/$8,468.95)*(365/151 days)
