The Covered Calls Advisor Portfolio (CCAP) contained a total of twelve covered calls positions with November 2010 expirations, with the following results:
- Decisions were made earlier this week to roll-up-and-out from three existing in-the-money Nov2010 covered calls positions (Intel Corp., iShares MSCI Emerging Markets ETF, and Research in Motion Ltd.) into Dec2010 positions. Separate posts were made on this blog earlier this week for each of these transactions on the day they occurred.
- The Nov2010 iPath S&P 500 VIX Short-Term Futures ETN (VXX) covered calls were closed out earlier this week at a nice profit.
Of the remaining eight positions that were held until Nov2010 expiration this past Friday:
- Three positions (Domtar Corp, Guess? Inc, and one-half of the Microsoft Corp. position) finished in-the-money. The calls were exercised and the shares were called away.
The annualized return-on-investment results achieved on these three assigned positions were as follows:
1. Domtar Corp. -- +60.8 %
2. Guess? Inc. -- +66.3 %
3. Microsoft Corp. -- +41.5 %
Detailed results for each of these three covered calls positions that were assigned (called away) upon Nov2010 expiration are described below.
- The remaining six positions in the CCAP (Bank of America, iShares MSCI China ETF, International Paper, one-half of the Microsoft Corp position, Oshkosh Corp, and Petrobras) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Dec2010 covered call positions. The related transactions will be made this week and the actual transactions will be posted on this blog site on the same day they occur.
The overall performance results for the three assigned Nov2010 covered calls positions were as follows:
1. Domtar Corp.(UFS) -- Closed
The transactions history is as follows:
06/23/2010 Bought 400 UFS @ $55.10
06/23/2010 Sold 4 UFS Jul2010 $60.00 Calls @ $1.10
07/17/2010 Jul2010 Options Expired
Note: The closing price of UFS was $47.77 on expiration Friday.
07/22/2010 Sold 4 UFS Aug2010 $55.00 Calls @ $1.20
Note: The price of UFS was $50.80 today when these options were sold.
08/13/2010 Buy-to-Close (BTC) 4 UFS Aug2010 $55.00 Call Options @ $5.70
08/12/2010 Sell-to-Open (STO) 4 UFS Sep2010 $65.00 Call Options @ $1.85
Note: The price of UFS was $61.38 today when these options were sold.
09/17/2010 Sep2010 Options Expired
09/20/2010 Sell-to-Open (STO) 4 UFS Oct2010 $65.00 Call Options @ $2.10
Note: The price of UFS was $63.70 today when these options were sold.
10/13/2010 Buy-to-Close (BTC) 4 UFS Oct2010 $65.00 Call Options @ $5.00
10/13/2010 Sell-to-Open (STO) 4 UFS Nov2010 $70.00 Call Options @ $3.30
11/20/2010 400 shares of UFS were in-the-money and the shares were called away (assigned) at $70.00. Note: The closing price of UFS was $77.40 on expiration this past Friday.
The overall performance results(including commissions) for the Domtar Corp.(UFS) transactions were as follows:
Stock Purchase Cost: $22,048.95
= ($55.10*400+$8.95 commission)
Net Profit:
(a) Options Income: -$543.65
= (400*($1.10+$1.20-$5.70+$1.85+$2.10-$5.00+$3.30) - 7*$11.95 commissions)
(b) Dividend Income: +$100.00 =($.25*400) Ex-dividend was on 9/13/2010
(c) Capital Appreciation (UFS assigned at $70.00): +$5,951.05
= ($70.00-$55.10)*400 - $8.95 commissions
Total Net Profit(UFS assigned at $70.00): +$5,507.40
= (-$543.65 +$100.00 +$5,951.05)
Absolute Return (UFS stock assigned at $70.00): +25.0%
= +$5,507.40/$22,048.95
Annualized Return: +60.8%
= (+$5,507.40/$22,048.95)*(365/150 days)
2. Guess? Inc.(GES) -- Closed
The transactions history was as follows:
10/27/2010 Bought 300 GES @ $39.51
10/27/2010 Sold 3 GES Nov2010 $40.00 Calls @ $1.30
11/20/2010 300 shares of GES were in-the-money and the shares were called away (assigned) at $40.00. Note: The closing price of GES was $44.55 on expiration Friday.
The overall performance results(including commissions) for the Guess? Inc.(GES) transactions were as follows:
Stock Purchase Cost: $11,861.95
= ($39.51*300+$8.95 commission)
Net Profit:
(a) Options Income: +$378.80
= (300*$1.30 - $11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation (GES stock assigned at $40.00): +$138.05
= ($40.00-$39.51)*300 - $8.95 commissions
Total Net Profit(GES stock assigned at $40.00): +$516.85
= (+$378.80 +$0.00 +$138.05)
Absolute Return (GES stock assigned at $40.00): +4.4%
= +$516.85/$11,861.95
Annualized Return: +66.3%
= (+$516.85/$11,861.95)*(365/24 days)
3. Microsoft Corp.(MSFT) -- Closed
The transactions history was as follows:
09/29/2010 Bought 500 MSFT @ $24.43
09/29/2010 Sold 5 MSFT Nov2010 $25.00 Calls @ $.76
11/16/2010 Ex-Dividend of $80.00 = $.16 * 500 shares
11/20/2010 500 shares of MSFT were in-the-money and the shares were called away (assigned) at $25.00. Note: The closing price of MSFT was $25.69 on expiration Friday.
The overall performance results(including commissions) for the Microsoft Corp.(MSFT) transactions were as follows:
Stock Purchase Cost: $12,223.95
= ($24.43*500+$8.95 commission)
Net Profit:
(a) Options Income: +$367.30
= (500*$.76 - $12.70 commissions)
(b) Dividend Income: +$80.00 =($.16 * 500 shares) Ex-div on 11/16/2010
(c) Capital Appreciation (MSFT stock assigned at $25.00): +$276.05
= ($25.00-$24.43)*500 - $8.95 commissions
Total Net Profit(MSFT stock assigned at $25.00): +$723.35
= (+$367.30 +$80.00 +$276.05)
Absolute Return (Stock Assigned at $25.00): +5.9%
= +$723.35/$12,223.95
Annualized Return: +41.5%
= (+$723.35/$12,223.95)*(365/52 days)
