Upon Dec2011 options expiration, all nine of the covered calls positions in the Covered Calls Advisor Portfolio (CCAP) expired. Today, a decision was made to re-establish covered calls positions in Citigroup Inc.(Symbol C) and Morgan Stanley (MS). The detailed transactions history for these positions as well as possible results are as follows:
1. Citigroup Inc.(C) -- Continuation
The transaction history is as follows:
10/26/2011 Sold 3 Citigroup, Inc.(C) Nov2011 $31.00 Put Options @ $1.96
Note: the price of Citi stock was $30.42 today when these puts were sold.
11/19/2011 Nov2011 Options Expired.
Note: the price of Citi stock was $26.28 upon options expiration.
11/30/2011 Sold 3 Dec2011 $27.00 call options @ $1.09
Note: the price of Citigroup stock was $26.61 when these options were sold.
12/17/2011 Dec2011 Options Expired.
Note: the price of Citigroup was $26.03 upon options expiration.
01/21/2011 Sold 3 Jan2012 $28.00 calls @$.99
Note: the price of Citi was $27.02 when these options were sold.
Two possible overall performance results(including commissions) for this Citigroup, Inc.(C) position would be as follows:
100% Cash-Secured Cost Basis: $9,300.00
= $31.00*300
Net Profit:
(a) Options Income: +$1,178.40
= ($1.96 + $1.09 + $.99) *300 shares - 3*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $27.02): -$1,202.95
= ($27.02-$31.00)*300 - $8.95 commissions
(c) Capital Appreciation (If Citigroup stock above $28.00 at Jan2012 expiration):
-$908.95
= ($28.00-$31.00) -$8.95 commissions
Total Net Profit(If stock price unchanged at $27.02): -$24.55
= (+$1,178.40 +$0.00 -$1,202.95)
Total Net Profit(If stock price above $28.00 at Jan2012 options expiration): +$269.45
= (+$1,178.40 +$0.00 -$908.95)
1. Absolute Return if Unchanged at $27.02: -0.3%
= -$24.55/$9,300.00
Annualized Return If Unchanged (ARIU): -1.1%
= (-$24.55/$9,300.00)*(365/87 days)
2. Absolute Return (If stock price above $28.00 at Jan2012 options expiration: +2.9%
= +$269.45/$9,300.00
Annualized Return (If stock price above $27.00 at expiration): +12.2%
= (+$269.45/$9,300.00)*(365/87 days)
2. Morgan Stanley (MS) -- Continuation
The transactions history is as follows:
10/26/2011 Sold 6 Morgan Stanley (MS) Nov2011 $17.00 Put Options @ $1.16
Note: the price of MS stock was $16.82 today when these puts were sold.
11/19/2011 Nov2011 MS put options exercised -- 600 shares MS purchased @ $17.00.
11/30/2011 Sold 6 MS Dec2011 $15.00 Calls @ $.44
Note: the price of MS was $14.18 today when these call options were sold.
12/17/2011 Dec2011 Options Expired.
Note: the price of Morgan Stanley was $14.98 upon options expiration.
01/21/2011 Sold 6 Jan2012 $16.00 calls @$.69
Note: the price of MS was $15.39 when these options were sold.
Two possible overall performance results(including commissions) for this Morgan Stanley (MS) transaction would be as follows:
100% Cash-Secured Cost Basis: $10,200.00
= $17.00*600
Net Profit:
(a) Options Income: +$1,333.65
= ($1.16+$.44+$.69)*600 shares - 3*$13.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $15.39): -$974.95
= ($15.39-$17.00)*600 - $8.95 commissions
(c) Capital Appreciation (If MS stock assigned at $16.00 at Jan2012 expiration):
-$608.95 = ($16.00-$17.00)*600 - $8.95 commissions
Total Net Profit(If stock price unchanged at $15.39): +$358.70
= (+$1,333.65 +$0.00 -$974.95)
Total Net Profit(If stock price above $16.00 at Jan2012 options expiration): +$724.70
= (+$1,333.65 +$0.00 -$608.95)
1. Absolute Return if Unchanged at $15.39: +3.5%
= +$358.70/$10,200.00
Annualized Return If Unchanged (ARIU): +14.8%
= (+$358.70/$10,200.00)*(365/87 days)
2. Absolute Return (If stock price above $16.00 at Jan2012 options expiration): +7.1%
= +$724.70/$10,200.00
Annualized Return (If stock price above $15.00 at expiration): +29.8%
= (+$724.70/$10,200.00)*(365/87 days)
Thursday, December 22, 2011
Monday, December 19, 2011
Overall Market Meter Rating Remains at "Neutral"
Each month during options expiration week, the Covered Calls Advisor re-calculates the current values for each of the eight factors used to determine the "Overall Market Meter" rating. This month, the Overall Market Meter rating remains unchanged at Neutral.
The eight factors used can be categorized as:
- macroeconomic (the first two indicators in the chart below),
- momentum (next two indicators in the chart),
- value (next three indicators), and
- growth (the last indicator).
The current Market Meter Average of 3.38 (see blue line in chart above) is identical with last month's overall rating. Moreover, all eight factors used to determine the Overall Market Meter rating remained unchanged from November's analysis.
As shown in the right sidebar, the covered calls investing strategy corresponding to this overall Neutral sentiment is to "on-average sell 1% out-of-the-money covered calls for the nearest expiration month." So, now with the December 2011 options expiration having occurred, newly established positions for January 2012 expiration will be established in accordance with this guideline.
Your comments or questions regarding this post (or the details related to any of the eight factors used in this model) are welcomed. Please click on the "comments" link below or email me at the address shown in the upper-right sidebar.
Jeff
The eight factors used can be categorized as:
- macroeconomic (the first two indicators in the chart below),
- momentum (next two indicators in the chart),
- value (next three indicators), and
- growth (the last indicator).
The current Market Meter Average of 3.38 (see blue line in chart above) is identical with last month's overall rating. Moreover, all eight factors used to determine the Overall Market Meter rating remained unchanged from November's analysis.
As shown in the right sidebar, the covered calls investing strategy corresponding to this overall Neutral sentiment is to "on-average sell 1% out-of-the-money covered calls for the nearest expiration month." So, now with the December 2011 options expiration having occurred, newly established positions for January 2012 expiration will be established in accordance with this guideline.
Your comments or questions regarding this post (or the details related to any of the eight factors used in this model) are welcomed. Please click on the "comments" link below or email me at the address shown in the upper-right sidebar.
Jeff
December 2011 Expiration Results
The Covered Calls Advisor Portfolio (CCAP) contained a total of nine covered calls positions with December 2011 expirations. All nine positions in the CCAP (Apple Inc., Citigroup Inc., Halliburton Co., iShares MSCI Emerging Markets ETF, iShares MSCI South Korea ETF, iShares MSCI Taiwan ETF, Morgan Stanley, Peabody Energy Corp., and Valero Energy) expired out-of-the-money. Decisions will be made to either sell these equities, or to keep them and sell calls to establish January 2012 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.
Wednesday, December 7, 2011
Country Value Rankings
About once a quarter, the Covered Calls Advisor calculates the seven factors used to determine the current "Country Value Rankings". Today's results (shown in the table below), provides a value-oriented and objective framework that assists this advisor to make decisions regarding overweighting and underweighting specific countries and regions in the Covered Calls Advisor's portfolio.
A comprehensive approach to asset allocation goes beyond diversification solely by asset classes (i.e. stocks, bonds, real estate, commodities, etc.); it should also include diversification by global geography. Behavioral finance research has clearly identified the profound tendency of most investors to succumb to "home-country bias". Legendary investor John Templeton was a leader in advocating for developing a global-oriented value investing perspective to achieve investing outperformance.
Note: For expanded view, left click on this spreadsheet
The Country Value Rankings table above is based on a weighted-average ranking system. You will notice that there are seven categories (and one factor for each category) used in the analysis of each country as follows:
The next-to-last column on the Country Value Rankings spreadsheet shows the Weighted Average Summation Total for each country. It is interesting that the Top 5 countries are Asian -- China, Hong Kong, Taiwan, South Korea, and Malaysia. Thus, investments in the Covered Calls Advisor Portfolio (shown in the right sidebar of this blog) will be substantially overweighted in these higher rated countries. It should also be noted that the U.S. is ranked 16th of the 21 countries rated, so U.S.-based companies selected for investment will be those with significant exposure to sales in countries/regions with relatively high expected GDP Growth in 2012.
This Country Value Rankings spreadsheet is detailed in terms of both the methodolgy used and the resources used to capture the information for each country. If you are interested in these details and would like further information or clarification, please share your comments and questions in writing. They are always welcomed. Click the 'comments' link below to post your feedback. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog.
Hopefully, this information is helpful in your thinking and analysis of your own equities selection methods related to your covered calls investing process!
Regards and Godspeed to All,
Jeff
A comprehensive approach to asset allocation goes beyond diversification solely by asset classes (i.e. stocks, bonds, real estate, commodities, etc.); it should also include diversification by global geography. Behavioral finance research has clearly identified the profound tendency of most investors to succumb to "home-country bias". Legendary investor John Templeton was a leader in advocating for developing a global-oriented value investing perspective to achieve investing outperformance.
Note: For expanded view, left click on this spreadsheet
The Country Value Rankings table above is based on a weighted-average ranking system. You will notice that there are seven categories (and one factor for each category) used in the analysis of each country as follows:
The next-to-last column on the Country Value Rankings spreadsheet shows the Weighted Average Summation Total for each country. It is interesting that the Top 5 countries are Asian -- China, Hong Kong, Taiwan, South Korea, and Malaysia. Thus, investments in the Covered Calls Advisor Portfolio (shown in the right sidebar of this blog) will be substantially overweighted in these higher rated countries. It should also be noted that the U.S. is ranked 16th of the 21 countries rated, so U.S.-based companies selected for investment will be those with significant exposure to sales in countries/regions with relatively high expected GDP Growth in 2012.
This Country Value Rankings spreadsheet is detailed in terms of both the methodolgy used and the resources used to capture the information for each country. If you are interested in these details and would like further information or clarification, please share your comments and questions in writing. They are always welcomed. Click the 'comments' link below to post your feedback. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog.
Hopefully, this information is helpful in your thinking and analysis of your own equities selection methods related to your covered calls investing process!
Regards and Godspeed to All,
Jeff
Friday, December 2, 2011
Continuation Transaction -- Apple Inc.
Today, a decision was made to retain the 100 shares held in Apple Inc.(AAPL) and to establish a Dec2011 covered call position. The detailed transactions as well as some possible results for this investment are as follows:
Apple Inc.(AAPL) -- Continuation
The transactions history is as follows:
09/19/2011 Bought 100 shares AAPL at $396.544
09/19/2011 Sold 1 AAPL Oct2011 $410 Call Option @ $10.15
10/22/2011 Oct2011 option expired.
Note: the AAPL price was $392.87 at option expiration.
10/24/2011 Sold 1 AAPL Nov2011 $410 Call Option @ $7.20
Note: the price of AAPL was $399.10 when the option was sold.
11/19/2011 Nov2011 AAPL options expired.
11/30/2011 Sold 1 AAPL Dec2011 $400.00 Call @ $4.40
Note: the price of AAPL was $392.94 today when this call option was sold.
Some possible performance results(including commissions) for this AAPL position are as follows:
Stock Purchase Cost: $39,663.35
= ($396.544*100+$8.95 commission)
Net Profit:
(a) Options Income: +$2,145.90
= (100*($10.15+$7.20+$4.40) - 3*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $392.94): -$369.35
= ($392.94-$396.544)*100 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $400.00 at expiration): +$336.65
= ($400.00-$396.544)*100 - $8.95 commissions
Total Net Profit (If stock price unchanged at $392.94): +$1,776.55
= (+$2,145.90 +$0.00 -$369.35)
Total Net Profit (If stock assigned at $400.00): +$2,482.55
= (+$2,145.90 +$0.00 +$336.65)
1. Absolute Return (If stock price unchanged at $392.94): +4.5%
= +$1,776.55/$39,663.35
Annualized Return If Unchanged (ARIU) +18.4%
= (+$1,776.55/$39,663.35)*(365/89 days)
2. Absolute Return (If stock assigned at $400.00 strike price): +6.3%
= +$2,482.55/$39,663.35
Annualized Return If Assigned (ARIA): +25.7%
= (+$2,482.55/$39,663.35)*(365/89 days)
Apple Inc.(AAPL) -- Continuation
The transactions history is as follows:
09/19/2011 Bought 100 shares AAPL at $396.544
09/19/2011 Sold 1 AAPL Oct2011 $410 Call Option @ $10.15
10/22/2011 Oct2011 option expired.
Note: the AAPL price was $392.87 at option expiration.
10/24/2011 Sold 1 AAPL Nov2011 $410 Call Option @ $7.20
Note: the price of AAPL was $399.10 when the option was sold.
11/19/2011 Nov2011 AAPL options expired.
11/30/2011 Sold 1 AAPL Dec2011 $400.00 Call @ $4.40
Note: the price of AAPL was $392.94 today when this call option was sold.
Some possible performance results(including commissions) for this AAPL position are as follows:
Stock Purchase Cost: $39,663.35
= ($396.544*100+$8.95 commission)
Net Profit:
(a) Options Income: +$2,145.90
= (100*($10.15+$7.20+$4.40) - 3*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $392.94): -$369.35
= ($392.94-$396.544)*100 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $400.00 at expiration): +$336.65
= ($400.00-$396.544)*100 - $8.95 commissions
Total Net Profit (If stock price unchanged at $392.94): +$1,776.55
= (+$2,145.90 +$0.00 -$369.35)
Total Net Profit (If stock assigned at $400.00): +$2,482.55
= (+$2,145.90 +$0.00 +$336.65)
1. Absolute Return (If stock price unchanged at $392.94): +4.5%
= +$1,776.55/$39,663.35
Annualized Return If Unchanged (ARIU) +18.4%
= (+$1,776.55/$39,663.35)*(365/89 days)
2. Absolute Return (If stock assigned at $400.00 strike price): +6.3%
= +$2,482.55/$39,663.35
Annualized Return If Assigned (ARIA): +25.7%
= (+$2,482.55/$39,663.35)*(365/89 days)
Wednesday, November 30, 2011
Returns -- Through November 2011
1. November 2011 Year-to-Date Results:
As shown in the "Year-to-Date 2011" line in the chart below, the Covered Calls Advisor Portfolio (CCAP) has slightly underperformed the benchmark Russell 3000 index by .39 percentage points (-1.77% minus -1.38%) over the first eleven months of calendar year 2011.
CCAP Absolute Return (Jan 1st through November 30th, 2011) = -1.77%
($282,375.52-$287,453.75)/$287,453.75
Benchmark Russell 3000(IWV) Absolute Return(Jan 1st to November 30th, 2011) = -1.38% ($73.92-$74.95)/$74.95
2. Prior Years Results:
The Covered Calls Advisor Portfolio (CCAP) began in September, 2007. The annualized returns achieved each year for 2007 through 2010 compared with the Russell 3000 benchmark were as follows:
As a reminder, the Covered Calls Advisor Portfolio is not identical to the advisor's personal portfolio. However, it does provide a comparable overall portfolio return result since all equities in the CCAP are also held in this advisor's personal portfolio. To ensure comparability, all transaction dates and transaction prices herein are identical to those that were established in the Covered Calls Advisor's personal portfolio. The primary difference between the two accounts is the total number of shares held for each equity. This approach is used to preserve the confidentiality of the total value of the Covered Call Advisor's personal portfolio.
The Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent'. Here's an example to aid understanding of how the overall portfolio performance is determined: If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100.
As shown in the right sidebar near the top of this page, the Covered Calls Advisor's current Overall Market Meter rating is "NEUTRAL". The corresponding investing strategy is to, on-average, sell 1% out-of-the-money covered calls for the nearest expiration month.
If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.
Regards and Godspeed,
Jeff
As shown in the "Year-to-Date 2011" line in the chart below, the Covered Calls Advisor Portfolio (CCAP) has slightly underperformed the benchmark Russell 3000 index by .39 percentage points (-1.77% minus -1.38%) over the first eleven months of calendar year 2011.
CCAP Absolute Return (Jan 1st through November 30th, 2011) = -1.77%
($282,375.52-$287,453.75)/$287,453.75
Benchmark Russell 3000(IWV) Absolute Return(Jan 1st to November 30th, 2011) = -1.38% ($73.92-$74.95)/$74.95
2. Prior Years Results:
The Covered Calls Advisor Portfolio (CCAP) began in September, 2007. The annualized returns achieved each year for 2007 through 2010 compared with the Russell 3000 benchmark were as follows:
As a reminder, the Covered Calls Advisor Portfolio is not identical to the advisor's personal portfolio. However, it does provide a comparable overall portfolio return result since all equities in the CCAP are also held in this advisor's personal portfolio. To ensure comparability, all transaction dates and transaction prices herein are identical to those that were established in the Covered Calls Advisor's personal portfolio. The primary difference between the two accounts is the total number of shares held for each equity. This approach is used to preserve the confidentiality of the total value of the Covered Call Advisor's personal portfolio.
The Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent'. Here's an example to aid understanding of how the overall portfolio performance is determined: If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100.
As shown in the right sidebar near the top of this page, the Covered Calls Advisor's current Overall Market Meter rating is "NEUTRAL". The corresponding investing strategy is to, on-average, sell 1% out-of-the-money covered calls for the nearest expiration month.
If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.
Regards and Godspeed,
Jeff
Continuation Transactions -- Nine Covered Calls Positions
Upon Nov2011 options expiration, eleven of the thirteen total covered calls positions in the Covered Calls Advisor Portfolio (CCAP) expired. Today, a decision was made to re-establish covered calls positions for nine of these eleven equities (Citigroup Inc., Halliburton Co., iShares MSCI China ETF, iShares MSCI Emerging Markets ETF, iShares MSCI South Korea ETF, Morgan Stanley, Mylan Inc., Peabody Energy, and Valero Energy). The detailed transactions history for these positions as well as possible results for these investments are as follows:
1. Citigroup Inc.(C) -- Continuation
The transaction history is as follows:
10/26/2011 Sold 3 Citigroup, Inc.(C) Nov2011 $31.00 Put Options @ $1.96
Note: the price of Citi stock was $30.42 today when these puts were sold.
11/19/2011 Nov2011 Options Expired.
Note: the price of Citi stock was $26.28 upon options expiration.
11/30/2011 Sold 3 Dec2011 $27.00 call options @ $1.09
Note: the price of Citigroup stock was $26.61 when these options were sold.
Two possible overall performance results(including commissions) for this Citigroup, Inc.(C) position would be as follows:
100% Cash-Secured Cost Basis: $9,300.00
= $31.00*300
Net Profit:
(a) Options Income: +$892.60
= ($1.96 + $1.09) *300 shares - 2*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $26.61): -$1,325.95
= ($26.61-$31.00)*300 - $8.95 commissions
(c) Capital Appreciation (If Citigroup stock above $27.00 at Dec2011 expiration):
-$1,191.05
= ($27.00-$31.00) -$8.95 commissions
Total Net Profit(If stock price unchanged at $26.61): -$433.35
= (+$892.60 +$0.00 -$1,325.95)
Total Net Profit(If stock price above $27.00 at Dec2011 options expiration): -$298.45
= (+$892.60 +$0.00 -$1,191.05)
1. Absolute Return if Unchanged at $26.61: -4.7%
= -$433.35/$9,300.00
Annualized Return If Unchanged (ARIU): -32.7%
= (-$433.35/$9,300.00)*(365/52 days)
2. Absolute Return (If stock price above $27.00 at Dec2011 options expiration: -3.2%
= -$298.45/$9,300.00
Annualized Return (If stock price above $27.00 at expiration): -22.5%
= (-$298.45/$9,300.00)*(365/52 days)
2. Halliburton Co. -- Continuation
The transaction history is as follows:
10/26/2011 Sold 3 Halliburton Co.(HAL) Nov2011 $36.00 Put Options @ $2.06
Note: the price of HAL stock was $35.56 today when these puts were sold.
11/19/2011 Nov2011 Options Expired.
Note: the price of Halliburton stock was $35.96 upon options expiration.
11/30/2011 Ex-Dividend payment of $27.00 = $.09 * 300 shares
11/30/2011 Sold 3 Dec2011 $37.00 call options @ $1.05
Note: the price of Halliburton Co. stock was $35.99 when these options were sold.
Two possible overall performance results(including commissions) for this Halliburton Co.(HAL) position would be as follows:
100% Cash-Secured Cost Basis: $10,800.00
= $36.00*300
Net Profit:
(a) Options Income: +$910.60
= ($2.06 + $1.05)*300 shares - 2*$11.20 commissions
(b) Dividend Income: +$27.00 ($.09*300 shares)
(c) Capital Appreciation (If stock price unchanged at $35.99): -$11.95
= ($35.99 - $36.00)*300 - $8.95 commissions
(c) Capital Appreciation (If HAL stock above $37.00 at Dec2011 expiration): +$291.05= ($37.00-$36.00)*300 -$8.95 commissions
Total Net Profit(If stock price unchanged at $35.99): +$925.65
= (+$910.60 +$27.00 -$11.95)
Total Net Profit(If stock above $37.00 at Dec2011 options expiration):+$1,228.65
= (+$910.60 +$27.00 +$291.05)
1. Absolute Return if Unchanged at $35.99: +8.6%
= +$925.65/$10,800.00
Annualized Return If Unchanged (ARIU): +60.2%
= (+$925.65/$10,800.00)*(365/52 days)
2. Absolute Return (If stock above $37.00 at Dec2011 options expiration): +11.4%
= +$1,228.65/$10,800.00
Annualized Return (If stock price above $36.00 at expiration): +79.9%
= (+$1,228.65/$10,800.00)*(365/52 days)
3. iShares MSCI China ETF (FXI) -- Continuation
The transaction history is as follows:
04/18/2011 Bought 1,000 FXI @ $44.80
04/20/2011 Sold 10 FXI May2011 $47.00 Calls @ $.49
Note: the price of FXI was $45.88 when the calls were sold.
05/31/2011 Sold 10 FXI Jul2011 $47.00 Calls @ $.37
Note: The price of FXI was $45.18 when these call options were sold.
06/21/2011 FXI ETF distribution of $.68555 per share
07/16/2011 Jul2011 FXI options expired.
07/18/2011 Sold 10 FXI Aug2011 $42.00 Calls @$.71
08/20/2011 Aug2011 FXI options expired.
08/22/2011 Sold 10 FXI Sep2011 $42.00 Calls @ $.65
09/17/2011 Sep2011 FXI options expired.
09/20/2011 Sold 10 FXI Oct2011 $38.00 Calls @ $.47
10/22/2011 Oct2011 options expired.
10/26/2011 Sold 10 FXI Nov2011 $37.00 Calls @ $.86
11/19/2011 Nov2011 FXI options expired.
11/30/2011 Sold 10 FXI Jan2012 $38.00 Calls @ $1.10
Note: the price of FXI was $36.42 today when these call options were sold.
12/20/2011 Ex-Distribution $79.40 = $.0794 * 1,000 shares
Two possible overall performance results(including commissions) for these iShares MSCI China ETF (FXI) transactions would be as follows:
Stock Purchase Cost: $44,808.95
= ($44.80*1,000+$16.45 commission)
Net Profit:
(a) Options Income: +$4,561.10
= (1,000*($.49+$.37+$.71+$.65+$.47+$.86+$1.10) - 7*$12.70 commissions)
(b) Distribution Income: $767.95 = ($.68555+$.0794) * 1,000 shares
(c) Capital Appreciation (If FXI price unchanged at $36.42 at expiration): -$8,388.95
= ($36.42-$44.80)*1,000 - $8.95 commissions
(c) Capital Appreciation (If FXI assigned at $38.00 at expiration): -$6,808.95
= ($38.00-$44.80)*1,000 - $8.95 commissions
Total Net Profit (If FXI price unchanged at $36.42 at expiration): -$3,062.90
= (+$4,561.10 +$767.95 -$8,388.95)
Total Net Profit (If FXI assigned at $38.00): -$1,482.90
= (+$4,561.10 +$767.95 -$6,808.95)
1. Absolute Return (If FXI unchanged at $36.42 at expiration): -6.8%
= -$3,062.90/$44,808.95
Annualized Return (If FXI unchanged at expiration): -8.9%
= (-$3,062.90/$44,808.95)*(365/278 days)
2. Absolute Return (If FXI assigned at $38.00 at expiration): -3.3%
= -$1,482.90/$44,808.95
Annualized Return If Assigned (ARIA): -4.3%
= (-$1,482.90/$44,808.95)*(365/278 days)
4. iShares MSCI Emerging Markets ETF (EEM) -- Continuation
The transactions history is as follows:
04/18/2011 Bought 500 EEM @ $47.81
04/19/2011 Sold 5 EEM May2011 $49.00 Calls @ $.83
Note: the price of EEM was $48.32 when the calls were sold.
05/27/2011 Sold 5 EEM Jun2011 $49.00 Calls @ $.44
Note: the price of EEM was $47.83 when the calls were sold.
06/18/2011 Jun2011 Options Expired
Note: the price of EEM was $45.34 upon options expiration.
6/22/2011 Distribution Income $.46092 per share.
06/28/2011 Sold 5 EEM Jul2011 $47.00 Calls @ $.62
Note: price of EEM was $46.42 when these options were sold.
07/16/2011 Jul2011 EEM options expired.
07/18/2011 Sold 5 EEM Aug2011 $47.00 Calls @$.99
Note: The price of EEM was $46.55 when these call options were sold.
08/20/2011 Aug2011 EEM options expired.
08/22/2011 Sold 5 EEM Sep2011 $42.00 Calls @ $.71
09/17/2011 Sep2011 EEM options expired.
09/20/2011 Sold 5 EEM Oct2011 $42.00 Calls @ $.63
Note: The price of EEM was $39.68 when these call options were sold.
10/22/2011 Oct2011 options expired.
10/26/2011 Sold 5 EEM Nov2011 $41.00 Calls @ $.78
11/19/2011 Nov2011 EEM options expired.
11/30/2011 Sold 5 EEM Dec2011 $41.00 Calls @ $.59
Note: the price of EEM was $39.71 today when these call options were sold.
Two possible overall performance results(including commissions) for these iShares MSCI Emerging Markets ETF (EEM) transactions would be as follows:
Stock Purchase Cost: $23,913.95
= ($47.81*500+$8.95 commission)
Net Profit:
(a) Options Income: +$2,648.40
= [500*($.83 +$.35+$.62+$.99+$.71+$.63+$.78+$.59) - 8*$12.70 commissions]
(b) Distribution Income: $230.46 = $.46092 * 500 shares
(c) Capital Appreciation (If EEM unchanged at $39.71 at expiration): -$4,058.95
= ($39.71-$47.81)*500 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $41.00): -$3,413.95
= ($41.00-$47.81)*500 - $8.95 commissions
Total Net Profit (If EEM price unchanged at $39.71 at expiration): -$1,180.09
= (+$2,648.40 +$230.46 -$4,058.95)
Total Net Profit (If EEM assigned at $41.00): -$535.09
= (+$2,648.40 +$230.46 -$3,413.95)
1. Absolute Return (If EEM price unchanged at $39.68 at expiration): -4.9%
= -$1,180.09/$23,913.95
Annualized Return if Unchanged at expiration (ARIU): -7.4%
= (-$1,180.09/$23,913.95)*(365/243 days)
2. Absolute Return (If EEM assigned at $41.00 at expiration): -2.2%
= -$535.09/$23,913.95
Annualized Return If Assigned (ARIA): -3.4%
= (-$535.09/$23,913.95)*(365/243 days)
5. iShares MSCI South Korea ETF (EWY) -- Continuation
The transactions history is as follows:
10/25/2011 Bought 800 EWY @ $54.62
10/25/2011 Sold 8 EWY Nov2011 $54.00 Calls @ $2.59
Note: these call options were sold with the price of EWY at $54.62
11/19/2011 Nov2011 EWY options expired.
11/30/2011 Sold 8 EWY Dec2011 $56.00 Calls @ $1.48
Note: the price of EWY was $55.38 today when these call options were sold.
Two possible overall performance results(including commissions) for the EWY position would be as follows:
Stock Purchase Cost: $43,704.95
= ($54.62*800+$8.95 commission)
Net Profit:
(a) Options Income: +$3,226.10
= (800*($2.59+$1.48) - 2*$14.95 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If EWY price unchanged at $55.38): +$599.05
= ($55.38-$54.62)*800 - $8.95 commissions
(c) Capital Appreciation (If EWY assigned at $56.00): +$1,095.05
= ($56.00-$54.62)*800 - $8.95 commissions
Total Net Profit (If EWY price unchanged at $55.38): +$3,825.15
= (+$3,226.10 +$0.00 +$599.05)
Total Net Profit(If EWY assigned at $56.00): +$4,321.15
= (+$3,226.10 +$0.00 +$1,095.05)
1. Absolute Return if Unchanged at $55.38: +8.8%
= +$3,825.15/$43,704.95
Annualized Return If Unchanged (ARIU): +60.3%
= (+$3,825.15/$43,704.95)*(365/53 days)
2. Absolute Return if Assigned at $56.00: +9.9%
= +$4,321.15/$43,704.95
Annualized Return If Assigned (ARIA): +68.1%
= (+$4,321.15/$43,704.95)*(365/53 days)
6. Morgan Stanley -- Continuation
The transactions history is as follows:
10/26/2011 Sold 6 Morgan Stanley (MS) Nov2011 $17.00 Put Options @ $1.16
Note: the price of MS stock was $16.82 today when these puts were sold.
11/19/2011 Nov2011 MS put options exercised -- 600 shares MS purchased @ $17.00.
11/30/2011 Sold 6 MS Dec2011 $15.00 Calls @ $.44
Note: the price of MS was $14.18 today when these call options were sold.
Two possible overall performance results(including commissions) for this Morgan Stanley (MS) transaction would be as follows:
100% Cash-Secured Cost Basis: $10,200.00
= $17.00*600
Net Profit:
(a) Options Income: +$933.10
= ($1.16+$.44)*600 shares - 2*$13.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $14.18): -$1,700.95
= ($14.18-$17.00)*600 - $8.95 commissions
(c) Capital Appreciation (If MS stock assigned at $15.00 at Dec2011 expiration):
-$1,208.95 = ($15.00-$17.00)*600 - $8.95 commissions
Total Net Profit(If stock price unchanged at $14.18): -$767.85
= (+$933.10 +$0.00 -$1,700.95)
Total Net Profit(If stock price above $15.00 at Nov2011 options expiration): -$275.85
= (+$933.10 +$0.00 -$1,208.95)
1. Absolute Return if Unchanged at $14.18: -7.5%
= -$767.85/$10,200.00
Annualized Return If Unchanged (ARIU): -52.8%
= (-$767.85/$10,200.00)*(365/52 days)
2. Absolute Return (If stock price above $15.00 at Dec2011 options expiration): -2.7%
= -275.85/$10,200.00
Annualized Return (If stock price above $15.00 at expiration): -19.0%
= (-275.85/$10,200.00)*(365/52 days)
7. Mylan Inc. -- Continuation
The transaction history is as follows:
07/18/2011 Sold 5 Mylan Inc. (MYL) Aug2011 $23.00 Put Options @ $1.06
Note: the price of MYL stock was $22.98 today when these puts were sold.
08/20/2011 Aug2011 MYL options exercised and stock purchased at $23.00 per share.
08/22/2011 Sold 5 MYL Sep2011 $22.00 Calls @ $.46
09/17/2011 Sep2011 MYL options expired.
09/20/2011 Sold 5 MYL Oct2011 $22.00 Calls @ $.63
Note: The price of MYL was $20.48 when these call options were sold.
10/22/2011 Oct2011 options expired.
Note: the MYL price was $18.04 at option expiration.
10/24/2011 Sold 5 MYL Nov2011 $19.00 Call Options @ $.56
Note: the price of MYL was $18.08 when the options were sold.
11/19/2011 Nov2011 MYL options expired.
11/30/2011 Sold 5 MYL Jan2011 $20.00 Calls @ $1.11
Note: the price of MYL was $19.38 today when these call options were sold.
Two possible overall performance results(including commissions) for the Mylan Inc. transactions would be as follows:
Stock Purchase Cost: $11,508.95
= ($23.00*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,846.50
= 500*($1.06+$.46+$.63+$.56+$1.11) - 5*$12.70 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If MYL unchanged at $19.38):
-$1,818.95 = ($19.38-$23.00)*500 - $8.95 commissions
(c) Capital Appreciation (If MYL exercised at $20.00): -$1,508.95
= ($20.00-$23.00)*500 - $8.95 commissions
Total Net Profit(If MYL unchanged at $19.38): +$27.55
= (+$1,846.50 +$0.00 -$1,818.95)
Total Net Profit(If MYL exercised at $20.00): +$337.55
= (+$1,846.50 +$0.00 -$1,508.95)
1. Absolute Return if Unchanged at $19.38: +0.2%
= +27.55/$11,508.95
Annualized Return If Unchanged (ARIU): +0.5%
= (+27.55/$11,508.95)*(365/187 days)
2. Absolute Return if Assigned at $20.00: +2.9%
= +$337.55/$11,508.95
Annualized Return If Assigned (ARIA): +5.7%
= (+$337.55/$11,508.95)*(365/187 days)
8. Peabody Energy Corp. -- Continuation
The transaction history is as follows:
09/19/2011 Bought 300 shares BTU at $44.208
09/19/2011 Sold 3 BTU Oct2011 $47 Calls @ $1.67
10/22/2011 Oct2011 options expired.
Note: the BTU price was $38.89 at option expiration.
10/24/2011 Sold 3 BTU Nov2011 $41.00 Call Options @ $1.85
Note: the price of BTU was $40.40 when the options were sold.
11/19/2011 Nov2011 BTU options expired.
11/30/2011 Sold 3 BTU Dec2011 $39.00 Calls @ $1.10
Note: the price of BTU was $37.90 today when these call options were sold.
Two possible overall performance results(including commissions) for this Peabody Energy Corp.(BTU) position would be as follows:
Stock Purchase Cost: $13,271.35
= ($44.208*300+$8.95 commission)
Net Profit:
(a) Options Income: +$1,352.40
= (300*($1.67+$1.85+$1.10) - 3*$11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation (If stock unchanged at $37.90 at expiration): -$1,901.35
= ($37.90-$44.208)*300 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $39.00): -$1,571.35
= ($39.00-$44.208)*300 - $8.95 commissions
Total Net Profit (If stock price unchanged at $37.90 at expiration): -$548.95
= (+$1,352.40 +$0.00 -$1,901.35)
Total Net Profit (If stock assigned at $39.00): -$218.95
= (+$1,352.40 +$0.00 -$1,571.35)
1. Absolute Return (If stock unchanged at $37.90 at expiration): -4.1%
= -$548.95/$13,271.35
Annualized Return (If stock unchanged at expiration): -17.0%
= (-$548.95/$13,271.35)*(365/89 days)
2. Absolute Return (If stock assigned at $39.00 at expiration): +0.5%
= +$62.25/$13,271.35
Annualized Return (If stock assigned at $39.00): +1.9%
= (+$62.25/$13,271.35)*(365/89 days)
9. Valero Energy Corp. -- Continuation
The transaction history is as follows:
10/25/2011 Sold 4 Valero Energy Corp.(VLO) Nov2011 $22.00 Put Options @ $1.75
Note: the price of VLO stock was $21.26 today when these puts were sold.
11/19/2011 Nov2011 VLO put options exercised -- 400 shares VLO purchased @ $22.00.
11/30/2011 Sold 4 VLO Dec2011 $23.00 Calls @ $.61
Note: the price of VLO was $22.27 today when these call options were sold.
Two possible overall performance results(including commissions) for this Valero Energy Corp.(VLO) transaction would be as follows:
100% Cash-Secured Cost Basis: $8,800.00
= $22.00*400
Net Profit:
(a) Options Income: +$920.10
= ($1.75+$.61)*400 shares - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $22.27 at expiration): +$99.05
= ($22.27-$22.00)*400 - $8.95 commissions
(c) Capital Appreciation (If VLO stock above $23.00 at Dec2011 expiration): +$391.05
= ($23.00-$22.00)*400 -$8.95 commissions
Total Net Profit(If stock price unchanged at $21.26): +$1,019.15
= (+$920.10 +$0.00 +$99.05)
Total Net Profit(If stock price above $23.00 at Dec2011 options expiration):
+$1,311.15 = (+$920.10 +$0.00 +$391.05)
1. Absolute Return if Unchanged at $22.27: +11.6%
= +$1,019.15/$8,800.00
Annualized Return If Unchanged (ARIU): +79.8%
= (+$1,019.15/$8,800.00)*(365/53 days)
2. Absolute Return (If stock price above $23.00 at Dec2011 options expiration):
+14.9% = +$1,311.15/$8,800.00
Annualized Return (If stock price above $23.00 at expiration): +102.6%
= (+$1,311.15/$8,800.00)*(365/53 days)
1. Citigroup Inc.(C) -- Continuation
The transaction history is as follows:
10/26/2011 Sold 3 Citigroup, Inc.(C) Nov2011 $31.00 Put Options @ $1.96
Note: the price of Citi stock was $30.42 today when these puts were sold.
11/19/2011 Nov2011 Options Expired.
Note: the price of Citi stock was $26.28 upon options expiration.
11/30/2011 Sold 3 Dec2011 $27.00 call options @ $1.09
Note: the price of Citigroup stock was $26.61 when these options were sold.
Two possible overall performance results(including commissions) for this Citigroup, Inc.(C) position would be as follows:
100% Cash-Secured Cost Basis: $9,300.00
= $31.00*300
Net Profit:
(a) Options Income: +$892.60
= ($1.96 + $1.09) *300 shares - 2*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $26.61): -$1,325.95
= ($26.61-$31.00)*300 - $8.95 commissions
(c) Capital Appreciation (If Citigroup stock above $27.00 at Dec2011 expiration):
-$1,191.05
= ($27.00-$31.00) -$8.95 commissions
Total Net Profit(If stock price unchanged at $26.61): -$433.35
= (+$892.60 +$0.00 -$1,325.95)
Total Net Profit(If stock price above $27.00 at Dec2011 options expiration): -$298.45
= (+$892.60 +$0.00 -$1,191.05)
1. Absolute Return if Unchanged at $26.61: -4.7%
= -$433.35/$9,300.00
Annualized Return If Unchanged (ARIU): -32.7%
= (-$433.35/$9,300.00)*(365/52 days)
2. Absolute Return (If stock price above $27.00 at Dec2011 options expiration: -3.2%
= -$298.45/$9,300.00
Annualized Return (If stock price above $27.00 at expiration): -22.5%
= (-$298.45/$9,300.00)*(365/52 days)
2. Halliburton Co. -- Continuation
The transaction history is as follows:
10/26/2011 Sold 3 Halliburton Co.(HAL) Nov2011 $36.00 Put Options @ $2.06
Note: the price of HAL stock was $35.56 today when these puts were sold.
11/19/2011 Nov2011 Options Expired.
Note: the price of Halliburton stock was $35.96 upon options expiration.
11/30/2011 Ex-Dividend payment of $27.00 = $.09 * 300 shares
11/30/2011 Sold 3 Dec2011 $37.00 call options @ $1.05
Note: the price of Halliburton Co. stock was $35.99 when these options were sold.
Two possible overall performance results(including commissions) for this Halliburton Co.(HAL) position would be as follows:
100% Cash-Secured Cost Basis: $10,800.00
= $36.00*300
Net Profit:
(a) Options Income: +$910.60
= ($2.06 + $1.05)*300 shares - 2*$11.20 commissions
(b) Dividend Income: +$27.00 ($.09*300 shares)
(c) Capital Appreciation (If stock price unchanged at $35.99): -$11.95
= ($35.99 - $36.00)*300 - $8.95 commissions
(c) Capital Appreciation (If HAL stock above $37.00 at Dec2011 expiration): +$291.05= ($37.00-$36.00)*300 -$8.95 commissions
Total Net Profit(If stock price unchanged at $35.99): +$925.65
= (+$910.60 +$27.00 -$11.95)
Total Net Profit(If stock above $37.00 at Dec2011 options expiration):+$1,228.65
= (+$910.60 +$27.00 +$291.05)
1. Absolute Return if Unchanged at $35.99: +8.6%
= +$925.65/$10,800.00
Annualized Return If Unchanged (ARIU): +60.2%
= (+$925.65/$10,800.00)*(365/52 days)
2. Absolute Return (If stock above $37.00 at Dec2011 options expiration): +11.4%
= +$1,228.65/$10,800.00
Annualized Return (If stock price above $36.00 at expiration): +79.9%
= (+$1,228.65/$10,800.00)*(365/52 days)
3. iShares MSCI China ETF (FXI) -- Continuation
The transaction history is as follows:
04/18/2011 Bought 1,000 FXI @ $44.80
04/20/2011 Sold 10 FXI May2011 $47.00 Calls @ $.49
Note: the price of FXI was $45.88 when the calls were sold.
05/31/2011 Sold 10 FXI Jul2011 $47.00 Calls @ $.37
Note: The price of FXI was $45.18 when these call options were sold.
06/21/2011 FXI ETF distribution of $.68555 per share
07/16/2011 Jul2011 FXI options expired.
07/18/2011 Sold 10 FXI Aug2011 $42.00 Calls @$.71
08/20/2011 Aug2011 FXI options expired.
08/22/2011 Sold 10 FXI Sep2011 $42.00 Calls @ $.65
09/17/2011 Sep2011 FXI options expired.
09/20/2011 Sold 10 FXI Oct2011 $38.00 Calls @ $.47
10/22/2011 Oct2011 options expired.
10/26/2011 Sold 10 FXI Nov2011 $37.00 Calls @ $.86
11/19/2011 Nov2011 FXI options expired.
11/30/2011 Sold 10 FXI Jan2012 $38.00 Calls @ $1.10
Note: the price of FXI was $36.42 today when these call options were sold.
12/20/2011 Ex-Distribution $79.40 = $.0794 * 1,000 shares
Two possible overall performance results(including commissions) for these iShares MSCI China ETF (FXI) transactions would be as follows:
Stock Purchase Cost: $44,808.95
= ($44.80*1,000+$16.45 commission)
Net Profit:
(a) Options Income: +$4,561.10
= (1,000*($.49+$.37+$.71+$.65+$.47+$.86+$1.10) - 7*$12.70 commissions)
(b) Distribution Income: $767.95 = ($.68555+$.0794) * 1,000 shares
(c) Capital Appreciation (If FXI price unchanged at $36.42 at expiration): -$8,388.95
= ($36.42-$44.80)*1,000 - $8.95 commissions
(c) Capital Appreciation (If FXI assigned at $38.00 at expiration): -$6,808.95
= ($38.00-$44.80)*1,000 - $8.95 commissions
Total Net Profit (If FXI price unchanged at $36.42 at expiration): -$3,062.90
= (+$4,561.10 +$767.95 -$8,388.95)
Total Net Profit (If FXI assigned at $38.00): -$1,482.90
= (+$4,561.10 +$767.95 -$6,808.95)
1. Absolute Return (If FXI unchanged at $36.42 at expiration): -6.8%
= -$3,062.90/$44,808.95
Annualized Return (If FXI unchanged at expiration): -8.9%
= (-$3,062.90/$44,808.95)*(365/278 days)
2. Absolute Return (If FXI assigned at $38.00 at expiration): -3.3%
= -$1,482.90/$44,808.95
Annualized Return If Assigned (ARIA): -4.3%
= (-$1,482.90/$44,808.95)*(365/278 days)
4. iShares MSCI Emerging Markets ETF (EEM) -- Continuation
The transactions history is as follows:
04/18/2011 Bought 500 EEM @ $47.81
04/19/2011 Sold 5 EEM May2011 $49.00 Calls @ $.83
Note: the price of EEM was $48.32 when the calls were sold.
05/27/2011 Sold 5 EEM Jun2011 $49.00 Calls @ $.44
Note: the price of EEM was $47.83 when the calls were sold.
06/18/2011 Jun2011 Options Expired
Note: the price of EEM was $45.34 upon options expiration.
6/22/2011 Distribution Income $.46092 per share.
06/28/2011 Sold 5 EEM Jul2011 $47.00 Calls @ $.62
Note: price of EEM was $46.42 when these options were sold.
07/16/2011 Jul2011 EEM options expired.
07/18/2011 Sold 5 EEM Aug2011 $47.00 Calls @$.99
Note: The price of EEM was $46.55 when these call options were sold.
08/20/2011 Aug2011 EEM options expired.
08/22/2011 Sold 5 EEM Sep2011 $42.00 Calls @ $.71
09/17/2011 Sep2011 EEM options expired.
09/20/2011 Sold 5 EEM Oct2011 $42.00 Calls @ $.63
Note: The price of EEM was $39.68 when these call options were sold.
10/22/2011 Oct2011 options expired.
10/26/2011 Sold 5 EEM Nov2011 $41.00 Calls @ $.78
11/19/2011 Nov2011 EEM options expired.
11/30/2011 Sold 5 EEM Dec2011 $41.00 Calls @ $.59
Note: the price of EEM was $39.71 today when these call options were sold.
Two possible overall performance results(including commissions) for these iShares MSCI Emerging Markets ETF (EEM) transactions would be as follows:
Stock Purchase Cost: $23,913.95
= ($47.81*500+$8.95 commission)
Net Profit:
(a) Options Income: +$2,648.40
= [500*($.83 +$.35+$.62+$.99+$.71+$.63+$.78+$.59) - 8*$12.70 commissions]
(b) Distribution Income: $230.46 = $.46092 * 500 shares
(c) Capital Appreciation (If EEM unchanged at $39.71 at expiration): -$4,058.95
= ($39.71-$47.81)*500 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $41.00): -$3,413.95
= ($41.00-$47.81)*500 - $8.95 commissions
Total Net Profit (If EEM price unchanged at $39.71 at expiration): -$1,180.09
= (+$2,648.40 +$230.46 -$4,058.95)
Total Net Profit (If EEM assigned at $41.00): -$535.09
= (+$2,648.40 +$230.46 -$3,413.95)
1. Absolute Return (If EEM price unchanged at $39.68 at expiration): -4.9%
= -$1,180.09/$23,913.95
Annualized Return if Unchanged at expiration (ARIU): -7.4%
= (-$1,180.09/$23,913.95)*(365/243 days)
2. Absolute Return (If EEM assigned at $41.00 at expiration): -2.2%
= -$535.09/$23,913.95
Annualized Return If Assigned (ARIA): -3.4%
= (-$535.09/$23,913.95)*(365/243 days)
5. iShares MSCI South Korea ETF (EWY) -- Continuation
The transactions history is as follows:
10/25/2011 Bought 800 EWY @ $54.62
10/25/2011 Sold 8 EWY Nov2011 $54.00 Calls @ $2.59
Note: these call options were sold with the price of EWY at $54.62
11/19/2011 Nov2011 EWY options expired.
11/30/2011 Sold 8 EWY Dec2011 $56.00 Calls @ $1.48
Note: the price of EWY was $55.38 today when these call options were sold.
Two possible overall performance results(including commissions) for the EWY position would be as follows:
Stock Purchase Cost: $43,704.95
= ($54.62*800+$8.95 commission)
Net Profit:
(a) Options Income: +$3,226.10
= (800*($2.59+$1.48) - 2*$14.95 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If EWY price unchanged at $55.38): +$599.05
= ($55.38-$54.62)*800 - $8.95 commissions
(c) Capital Appreciation (If EWY assigned at $56.00): +$1,095.05
= ($56.00-$54.62)*800 - $8.95 commissions
Total Net Profit (If EWY price unchanged at $55.38): +$3,825.15
= (+$3,226.10 +$0.00 +$599.05)
Total Net Profit(If EWY assigned at $56.00): +$4,321.15
= (+$3,226.10 +$0.00 +$1,095.05)
1. Absolute Return if Unchanged at $55.38: +8.8%
= +$3,825.15/$43,704.95
Annualized Return If Unchanged (ARIU): +60.3%
= (+$3,825.15/$43,704.95)*(365/53 days)
2. Absolute Return if Assigned at $56.00: +9.9%
= +$4,321.15/$43,704.95
Annualized Return If Assigned (ARIA): +68.1%
= (+$4,321.15/$43,704.95)*(365/53 days)
6. Morgan Stanley -- Continuation
The transactions history is as follows:
10/26/2011 Sold 6 Morgan Stanley (MS) Nov2011 $17.00 Put Options @ $1.16
Note: the price of MS stock was $16.82 today when these puts were sold.
11/19/2011 Nov2011 MS put options exercised -- 600 shares MS purchased @ $17.00.
11/30/2011 Sold 6 MS Dec2011 $15.00 Calls @ $.44
Note: the price of MS was $14.18 today when these call options were sold.
Two possible overall performance results(including commissions) for this Morgan Stanley (MS) transaction would be as follows:
100% Cash-Secured Cost Basis: $10,200.00
= $17.00*600
Net Profit:
(a) Options Income: +$933.10
= ($1.16+$.44)*600 shares - 2*$13.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $14.18): -$1,700.95
= ($14.18-$17.00)*600 - $8.95 commissions
(c) Capital Appreciation (If MS stock assigned at $15.00 at Dec2011 expiration):
-$1,208.95 = ($15.00-$17.00)*600 - $8.95 commissions
Total Net Profit(If stock price unchanged at $14.18): -$767.85
= (+$933.10 +$0.00 -$1,700.95)
Total Net Profit(If stock price above $15.00 at Nov2011 options expiration): -$275.85
= (+$933.10 +$0.00 -$1,208.95)
1. Absolute Return if Unchanged at $14.18: -7.5%
= -$767.85/$10,200.00
Annualized Return If Unchanged (ARIU): -52.8%
= (-$767.85/$10,200.00)*(365/52 days)
2. Absolute Return (If stock price above $15.00 at Dec2011 options expiration): -2.7%
= -275.85/$10,200.00
Annualized Return (If stock price above $15.00 at expiration): -19.0%
= (-275.85/$10,200.00)*(365/52 days)
7. Mylan Inc. -- Continuation
The transaction history is as follows:
07/18/2011 Sold 5 Mylan Inc. (MYL) Aug2011 $23.00 Put Options @ $1.06
Note: the price of MYL stock was $22.98 today when these puts were sold.
08/20/2011 Aug2011 MYL options exercised and stock purchased at $23.00 per share.
08/22/2011 Sold 5 MYL Sep2011 $22.00 Calls @ $.46
09/17/2011 Sep2011 MYL options expired.
09/20/2011 Sold 5 MYL Oct2011 $22.00 Calls @ $.63
Note: The price of MYL was $20.48 when these call options were sold.
10/22/2011 Oct2011 options expired.
Note: the MYL price was $18.04 at option expiration.
10/24/2011 Sold 5 MYL Nov2011 $19.00 Call Options @ $.56
Note: the price of MYL was $18.08 when the options were sold.
11/19/2011 Nov2011 MYL options expired.
11/30/2011 Sold 5 MYL Jan2011 $20.00 Calls @ $1.11
Note: the price of MYL was $19.38 today when these call options were sold.
Two possible overall performance results(including commissions) for the Mylan Inc. transactions would be as follows:
Stock Purchase Cost: $11,508.95
= ($23.00*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,846.50
= 500*($1.06+$.46+$.63+$.56+$1.11) - 5*$12.70 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If MYL unchanged at $19.38):
-$1,818.95 = ($19.38-$23.00)*500 - $8.95 commissions
(c) Capital Appreciation (If MYL exercised at $20.00): -$1,508.95
= ($20.00-$23.00)*500 - $8.95 commissions
Total Net Profit(If MYL unchanged at $19.38): +$27.55
= (+$1,846.50 +$0.00 -$1,818.95)
Total Net Profit(If MYL exercised at $20.00): +$337.55
= (+$1,846.50 +$0.00 -$1,508.95)
1. Absolute Return if Unchanged at $19.38: +0.2%
= +27.55/$11,508.95
Annualized Return If Unchanged (ARIU): +0.5%
= (+27.55/$11,508.95)*(365/187 days)
2. Absolute Return if Assigned at $20.00: +2.9%
= +$337.55/$11,508.95
Annualized Return If Assigned (ARIA): +5.7%
= (+$337.55/$11,508.95)*(365/187 days)
8. Peabody Energy Corp. -- Continuation
The transaction history is as follows:
09/19/2011 Bought 300 shares BTU at $44.208
09/19/2011 Sold 3 BTU Oct2011 $47 Calls @ $1.67
10/22/2011 Oct2011 options expired.
Note: the BTU price was $38.89 at option expiration.
10/24/2011 Sold 3 BTU Nov2011 $41.00 Call Options @ $1.85
Note: the price of BTU was $40.40 when the options were sold.
11/19/2011 Nov2011 BTU options expired.
11/30/2011 Sold 3 BTU Dec2011 $39.00 Calls @ $1.10
Note: the price of BTU was $37.90 today when these call options were sold.
Two possible overall performance results(including commissions) for this Peabody Energy Corp.(BTU) position would be as follows:
Stock Purchase Cost: $13,271.35
= ($44.208*300+$8.95 commission)
Net Profit:
(a) Options Income: +$1,352.40
= (300*($1.67+$1.85+$1.10) - 3*$11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation (If stock unchanged at $37.90 at expiration): -$1,901.35
= ($37.90-$44.208)*300 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $39.00): -$1,571.35
= ($39.00-$44.208)*300 - $8.95 commissions
Total Net Profit (If stock price unchanged at $37.90 at expiration): -$548.95
= (+$1,352.40 +$0.00 -$1,901.35)
Total Net Profit (If stock assigned at $39.00): -$218.95
= (+$1,352.40 +$0.00 -$1,571.35)
1. Absolute Return (If stock unchanged at $37.90 at expiration): -4.1%
= -$548.95/$13,271.35
Annualized Return (If stock unchanged at expiration): -17.0%
= (-$548.95/$13,271.35)*(365/89 days)
2. Absolute Return (If stock assigned at $39.00 at expiration): +0.5%
= +$62.25/$13,271.35
Annualized Return (If stock assigned at $39.00): +1.9%
= (+$62.25/$13,271.35)*(365/89 days)
9. Valero Energy Corp. -- Continuation
The transaction history is as follows:
10/25/2011 Sold 4 Valero Energy Corp.(VLO) Nov2011 $22.00 Put Options @ $1.75
Note: the price of VLO stock was $21.26 today when these puts were sold.
11/19/2011 Nov2011 VLO put options exercised -- 400 shares VLO purchased @ $22.00.
11/30/2011 Sold 4 VLO Dec2011 $23.00 Calls @ $.61
Note: the price of VLO was $22.27 today when these call options were sold.
Two possible overall performance results(including commissions) for this Valero Energy Corp.(VLO) transaction would be as follows:
100% Cash-Secured Cost Basis: $8,800.00
= $22.00*400
Net Profit:
(a) Options Income: +$920.10
= ($1.75+$.61)*400 shares - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $22.27 at expiration): +$99.05
= ($22.27-$22.00)*400 - $8.95 commissions
(c) Capital Appreciation (If VLO stock above $23.00 at Dec2011 expiration): +$391.05
= ($23.00-$22.00)*400 -$8.95 commissions
Total Net Profit(If stock price unchanged at $21.26): +$1,019.15
= (+$920.10 +$0.00 +$99.05)
Total Net Profit(If stock price above $23.00 at Dec2011 options expiration):
+$1,311.15 = (+$920.10 +$0.00 +$391.05)
1. Absolute Return if Unchanged at $22.27: +11.6%
= +$1,019.15/$8,800.00
Annualized Return If Unchanged (ARIU): +79.8%
= (+$1,019.15/$8,800.00)*(365/53 days)
2. Absolute Return (If stock price above $23.00 at Dec2011 options expiration):
+14.9% = +$1,311.15/$8,800.00
Annualized Return (If stock price above $23.00 at expiration): +102.6%
= (+$1,311.15/$8,800.00)*(365/53 days)
Monday, November 21, 2011
November 2011 Expiration Results
The Covered Calls Advisor Portfolio (CCAP) contained a total of thirteen covered calls positions with November 2011 expirations, with the following results:
- Eleven positions in the CCAP (Apple Inc., Citigroup, Halliburton, iShares MSCI Emerging Markets ETF, iShares MSCI China ETF, iShares MSCI South Korea ETF, iShares MSCI Taiwan ETF, Morgan Stanley, Mylan Inc., Peabody Energy Corp., and Valero Energy) expired out-of-the-money. Decisions will be made to either sell these equities, or to keep them and sell calls to establish December 2011 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.
- Two positions (Bunge Ltd. and International Paper Co.) were in-the-money and the stocks were assigned (i.e. stock called away) upon option expiration last Friday. The detailed history and return-on-investment results for these closed positions is as follows:
1. Bunge Ltd.(BG) -- Closed
The transaction history is as follows:
10/26/2011 Sold 3 Bunge Ltd.(BG) Nov2011 $60.00 Put Options @ $3.10
Note: the price of BG stock was $58.62 today when these puts were sold.
11/19/2011 3 BG Nov2011 $60.00 Put options expired.
Note: the price of BG was $60.83 upon close on November options expiration Friday.
The performance result(including commissions) for this Bunge Ltd.(BG)transaction was as follows:
100% Cash-Secured Cost Basis: $18,000.00
= $60.00*300
Net Profit:
(a) Options Income: +$918.80
= ($3.10*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If BG stock above $60.00 at Nov2011 expiration): +$0.00
= ($60.00-$60.00) -$0.00 commissions
Total Net Profit(Stock price above $60.00 at Nov2011 options expiration): +$918.80
= (+$918.80 +$0.00 +$0.00)
Absolute Return (Stock price above $60.00 at Nov2011 options expiration and put options thus expire worthless): +5.1%
= +$918.80/$18,000.00
Annualized Return: +77.6%
= (+$918.80/$18,000.00)*(365/24 days)
2. International Paper Co.(IP) -- Continuation Transaction
The transactions history is as follows:
09/19/2011 Bought 400 shares IP at $26.978
09/19/2011 Sold 4 IP Oct2011 $28 Calls @ $1.18
10/22/2011 Oct2011 options expired.
Note: the IP price was $25.93 at options expiration.
10/24/2011 Sold 4 IP Nov2011 $27.00 Call Options @ $.73
Note: the price of IP was $26.25 when the options were sold.
11/11/2011 Buy-to-Close 4 Nov2011 $27.00 Calls at $1.86
11/11/2011 Sell-to-Open 5 Dec2011 $28.00 Calls at $1.80
Note: the price of IP was $28.84 when this credit spread was transacted.
11/14/2011 Ex-Div $105.00 = $.2625 * 400 shares
11/19/2011 Nov2011 options expired.
Note: the price of IP was $28.02 at options expiration.
The overrall performance result(including commissions) for these International Paper Co.(IP) transactions was as follows:
Stock Purchase Cost: $10,800.15
= ($26.978*400+$8.95 commission)
Net Profit:
(a) Options Income: +$704.15
= (400*($1.18+$.73-$1.86+$1.80) - 3*$11.95 commissions)
(b) Dividend Income: +$105.00 = $.2625 * 400 shares
(c) Capital Appreciation (Stock assigned at $28.00): +$399.85
= ($28.00-$26.978)*400 - $8.95 commissions
Total Net Profit (Stock assigned at $28.00): +$1,209.00
= (+$704.15 +$105.00 +$399.85)
Absolute Return (Stock assigned at $28.00 at expiration): +11.2%
= +$1,209.00/$10,800.15
Annualized Return: +45.9%
= (+$1,209.00/$10,800.15)*(365/89 days)
This International Paper position demonstrates the triple-income potential of covered calls investing; by obtaining profit from all three potential profit sources available to covered calls investors, namely: (1) options income from selling calls; (2) dividend income; and (3) capital appreciation from an increase in the price of the underlying stock. Moreover, in this particular case, a total 11.2% absolute return was achieved from this 3-month investment (a 45.9% annualized return-on-investment) -- a very attractive result for an investment in a company in the low-growth Paper and Packaging industry.
- Eleven positions in the CCAP (Apple Inc., Citigroup, Halliburton, iShares MSCI Emerging Markets ETF, iShares MSCI China ETF, iShares MSCI South Korea ETF, iShares MSCI Taiwan ETF, Morgan Stanley, Mylan Inc., Peabody Energy Corp., and Valero Energy) expired out-of-the-money. Decisions will be made to either sell these equities, or to keep them and sell calls to establish December 2011 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.
- Two positions (Bunge Ltd. and International Paper Co.) were in-the-money and the stocks were assigned (i.e. stock called away) upon option expiration last Friday. The detailed history and return-on-investment results for these closed positions is as follows:
1. Bunge Ltd.(BG) -- Closed
The transaction history is as follows:
10/26/2011 Sold 3 Bunge Ltd.(BG) Nov2011 $60.00 Put Options @ $3.10
Note: the price of BG stock was $58.62 today when these puts were sold.
11/19/2011 3 BG Nov2011 $60.00 Put options expired.
Note: the price of BG was $60.83 upon close on November options expiration Friday.
The performance result(including commissions) for this Bunge Ltd.(BG)transaction was as follows:
100% Cash-Secured Cost Basis: $18,000.00
= $60.00*300
Net Profit:
(a) Options Income: +$918.80
= ($3.10*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If BG stock above $60.00 at Nov2011 expiration): +$0.00
= ($60.00-$60.00) -$0.00 commissions
Total Net Profit(Stock price above $60.00 at Nov2011 options expiration): +$918.80
= (+$918.80 +$0.00 +$0.00)
Absolute Return (Stock price above $60.00 at Nov2011 options expiration and put options thus expire worthless): +5.1%
= +$918.80/$18,000.00
Annualized Return: +77.6%
= (+$918.80/$18,000.00)*(365/24 days)
2. International Paper Co.(IP) -- Continuation Transaction
The transactions history is as follows:
09/19/2011 Bought 400 shares IP at $26.978
09/19/2011 Sold 4 IP Oct2011 $28 Calls @ $1.18
10/22/2011 Oct2011 options expired.
Note: the IP price was $25.93 at options expiration.
10/24/2011 Sold 4 IP Nov2011 $27.00 Call Options @ $.73
Note: the price of IP was $26.25 when the options were sold.
11/11/2011 Buy-to-Close 4 Nov2011 $27.00 Calls at $1.86
11/11/2011 Sell-to-Open 5 Dec2011 $28.00 Calls at $1.80
Note: the price of IP was $28.84 when this credit spread was transacted.
11/14/2011 Ex-Div $105.00 = $.2625 * 400 shares
11/19/2011 Nov2011 options expired.
Note: the price of IP was $28.02 at options expiration.
The overrall performance result(including commissions) for these International Paper Co.(IP) transactions was as follows:
Stock Purchase Cost: $10,800.15
= ($26.978*400+$8.95 commission)
Net Profit:
(a) Options Income: +$704.15
= (400*($1.18+$.73-$1.86+$1.80) - 3*$11.95 commissions)
(b) Dividend Income: +$105.00 = $.2625 * 400 shares
(c) Capital Appreciation (Stock assigned at $28.00): +$399.85
= ($28.00-$26.978)*400 - $8.95 commissions
Total Net Profit (Stock assigned at $28.00): +$1,209.00
= (+$704.15 +$105.00 +$399.85)
Absolute Return (Stock assigned at $28.00 at expiration): +11.2%
= +$1,209.00/$10,800.15
Annualized Return: +45.9%
= (+$1,209.00/$10,800.15)*(365/89 days)
This International Paper position demonstrates the triple-income potential of covered calls investing; by obtaining profit from all three potential profit sources available to covered calls investors, namely: (1) options income from selling calls; (2) dividend income; and (3) capital appreciation from an increase in the price of the underlying stock. Moreover, in this particular case, a total 11.2% absolute return was achieved from this 3-month investment (a 45.9% annualized return-on-investment) -- a very attractive result for an investment in a company in the low-growth Paper and Packaging industry.
Wednesday, November 16, 2011
Overall Market Meter Rating Remains at "Neutral"
Each month during options expiration week, the Covered Calls Advisor re-calculates the current values for each of the eight factors used to determine the "Overall Market Meter" rating. This month, the Overall Market Meter rating remains unchanged at Neutral.
The eight factors used can be categorized as:
- macroeconomic (the first two indicators in the chart below),
- momentum (next two indicators in the chart),
- value (next three indicators), and
- growth (the last indicator).
The current Market Meter Average of 3.38 (see blue line in chart above) is identical with last month's overall rating. Moreover, all eight factors used to determine the Overall Market Meter rating remained unchanged from November's analysis.
As shown in the right sidebar, the covered calls investing strategy corresponding to this overall Neutral sentiment is to "on-average sell 1% out-of-the-money covered calls for the nearest expiration month." So, now with the December 2011 options expiration having occurred, newly established positions for January 2012 expiration will be established in accordance with this guideline.
Your comments or questions regarding this post (or the details related to any of the eight factors used in this model) are welcomed. Please click on the "comments" link below or email me at the address shown in the upper-right sidebar.
Jeff
The eight factors used can be categorized as:
- macroeconomic (the first two indicators in the chart below),
- momentum (next two indicators in the chart),
- value (next three indicators), and
- growth (the last indicator).
The current Market Meter Average of 3.38 (see blue line in chart above) is identical with last month's overall rating. Moreover, all eight factors used to determine the Overall Market Meter rating remained unchanged from November's analysis.
As shown in the right sidebar, the covered calls investing strategy corresponding to this overall Neutral sentiment is to "on-average sell 1% out-of-the-money covered calls for the nearest expiration month." So, now with the December 2011 options expiration having occurred, newly established positions for January 2012 expiration will be established in accordance with this guideline.
Your comments or questions regarding this post (or the details related to any of the eight factors used in this model) are welcomed. Please click on the "comments" link below or email me at the address shown in the upper-right sidebar.
Jeff
Friday, November 11, 2011
Roll Up and Out -- International Paper Co.
International Paper goes ex-dividend next Monday with a $.2625 dividend. Today, with the price of IP at $28.84 at about 3:30 this afternoon, the four Nov2011 $27.00 covered calls were well in-the-money. At that time, there was only $.02 of extrinsic value (i.e. time value) remaining in the Nov2011 $27 options with eight days remaining until options expiration. The Covered Calls Advisor thought there was a strong likelihood that the Nov2011 $27s would be exercised and the stock would be called away. A decision was made to retain the IP stock and to roll-up-and-out to the Dec2011 $28.00 strike price. The related transactions were:
11/11/2011 Buy-to-Close 4 Nov2011 $27.00 Calls at $1.86
11/11/2011 Sell-to-Open 4 Dec2011 $28.00 Calls at $1.80
Note: the price of IP was $28.84 when this credit spread was transacted.
The overall transactions history and a possible return-on-investment result are detailed below:
1. International Paper Co.(IP) -- Continuation Transaction
The transactions history is as follows:
09/19/2011 Bought 400 shares IP at $26.978
09/19/2011 Sold 4 IP Oct2011 $28 Calls @ $1.18
10/22/2011 Oct2011 options expired.
Note: the IP price was $25.93 at option expiration.
10/24/2011 Sold 4 IP Nov2011 $27.00 Call Options @ $.73
Note: the price of IP was $26.25 when the options were sold.
11/11/2011 Buy-to-Close 4 Nov2011 $27.00 Calls at $1.86
11/11/2011 Sell-to-Open 5 Dec2011 $28.00 Calls at $1.80
Note: the price of IP was $28.84 when this credit spread was transacted.
11/14/2011 Ex-Div $105.00 = $.2625 * 400 shares
Two possible overall performance results(including commissions) for this International Paper Co.(IP) transaction would be as follows:
Stock Purchase Cost: $10,800.15
= ($26.978*400+$8.95 commission)
Net Profit:
(a) Options Income: +$704.15
= (400*($1.18+$.73-$1.86+$1.80) - 3*$11.95 commissions)
(b) Dividend Income: +$105.00 = $.2625 * 400 shares
(c) Capital Appreciation (If stock assigned at $28.00): +$399.85
= ($28.00-$26.978)*400 - $8.95 commissions
Total Net Profit (If stock assigned at $28.00): +$1,209.00
= (+$704.15 +$105.00 +$399.85)
Absolute Return (If stock assigned at $28.00 at expiration): +11.2%
= +$1,209.00/$10,800.15
Annualized Return (If stock assigned at $28.00): +45.9%
= (+$1,209.00/$10,800.15)*(365/89 days)
This position demonstrates the triple-income potential of covered calls investing; by obtaining profit from all three potential profit sources available to covered calls investors, namely: (1) options income from selling calls; (2) dividend income; and (3) capital appreciation from an increase in the price of the underlying stock. Moreover, in this particular case, a total 11.2% absolute return could be achieved from this 3-month investment (a 45.9% annualized return-on-investment) -- a very attractive result for an investment in a company in the low-growth, mundane Paper and Packaging industry.
11/11/2011 Buy-to-Close 4 Nov2011 $27.00 Calls at $1.86
11/11/2011 Sell-to-Open 4 Dec2011 $28.00 Calls at $1.80
Note: the price of IP was $28.84 when this credit spread was transacted.
The overall transactions history and a possible return-on-investment result are detailed below:
1. International Paper Co.(IP) -- Continuation Transaction
The transactions history is as follows:
09/19/2011 Bought 400 shares IP at $26.978
09/19/2011 Sold 4 IP Oct2011 $28 Calls @ $1.18
10/22/2011 Oct2011 options expired.
Note: the IP price was $25.93 at option expiration.
10/24/2011 Sold 4 IP Nov2011 $27.00 Call Options @ $.73
Note: the price of IP was $26.25 when the options were sold.
11/11/2011 Buy-to-Close 4 Nov2011 $27.00 Calls at $1.86
11/11/2011 Sell-to-Open 5 Dec2011 $28.00 Calls at $1.80
Note: the price of IP was $28.84 when this credit spread was transacted.
11/14/2011 Ex-Div $105.00 = $.2625 * 400 shares
Two possible overall performance results(including commissions) for this International Paper Co.(IP) transaction would be as follows:
Stock Purchase Cost: $10,800.15
= ($26.978*400+$8.95 commission)
Net Profit:
(a) Options Income: +$704.15
= (400*($1.18+$.73-$1.86+$1.80) - 3*$11.95 commissions)
(b) Dividend Income: +$105.00 = $.2625 * 400 shares
(c) Capital Appreciation (If stock assigned at $28.00): +$399.85
= ($28.00-$26.978)*400 - $8.95 commissions
Total Net Profit (If stock assigned at $28.00): +$1,209.00
= (+$704.15 +$105.00 +$399.85)
Absolute Return (If stock assigned at $28.00 at expiration): +11.2%
= +$1,209.00/$10,800.15
Annualized Return (If stock assigned at $28.00): +45.9%
= (+$1,209.00/$10,800.15)*(365/89 days)
This position demonstrates the triple-income potential of covered calls investing; by obtaining profit from all three potential profit sources available to covered calls investors, namely: (1) options income from selling calls; (2) dividend income; and (3) capital appreciation from an increase in the price of the underlying stock. Moreover, in this particular case, a total 11.2% absolute return could be achieved from this 3-month investment (a 45.9% annualized return-on-investment) -- a very attractive result for an investment in a company in the low-growth, mundane Paper and Packaging industry.
Monday, October 31, 2011
Returns -- Through October 2011
1. October 2011 Year-to-Date Results:
As shown in the "Year-to-Date 2011" line in the chart below, the Covered Calls Advisor Portfolio (CCAP) has underperformed the benchmark Russell 3000 index by 1.70 percentage points (-2.73% minus -1.03%) over the first ten months of calendar year 2011.
CCAP Absolute Return (Jan 1st through October 31st, 2011) = -2.73%
($279,606.21-$287,453.75)/$287,453.75
Benchmark Russell 3000(IWV) Absolute Return(Jan 1st through October 31st, 2011) = -1.03% = ($74.18-$74.95)/$74.95
2. Prior Years Results:
The Covered Calls Advisor Portfolio (CCAP) began in September, 2007. The annualized returns achieved each year for 2007 through 2010 compared with the Russell 3000 benchmark were as follows:
As a reminder, the Covered Calls Advisor Portfolio is not identical to the advisor's personal portfolio. However, it does provide a comparable overall portfolio return result since all equities in the CCAP are also held in this advisor's personal portfolio. To ensure comparability, all transaction dates and transaction prices herein are identical to those that were established in the Covered Calls Advisor's personal portfolio. The primary difference between the two accounts is the total number of shares held for each equity. This approach is used to preserve the confidentiality of the total value of the Covered Call Advisor's personal portfolio.
The Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent'. Here's an example to aid understanding of how the overall portfolio performance is determined: If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100. As shown in the right sidebar near the top of this page, the Covered Calls Advisor's current Overall Market Meter rating remains "SLIGHTLY BULLISH". The corresponding investing strategy is to, on-average, sell 2% out-of-the-money covered calls for the nearest expiration month.
If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.
Regards and Godspeed,
Jeff
As shown in the "Year-to-Date 2011" line in the chart below, the Covered Calls Advisor Portfolio (CCAP) has underperformed the benchmark Russell 3000 index by 1.70 percentage points (-2.73% minus -1.03%) over the first ten months of calendar year 2011.
CCAP Absolute Return (Jan 1st through October 31st, 2011) = -2.73%
($279,606.21-$287,453.75)/$287,453.75
Benchmark Russell 3000(IWV) Absolute Return(Jan 1st through October 31st, 2011) = -1.03% = ($74.18-$74.95)/$74.95
2. Prior Years Results:
The Covered Calls Advisor Portfolio (CCAP) began in September, 2007. The annualized returns achieved each year for 2007 through 2010 compared with the Russell 3000 benchmark were as follows:
As a reminder, the Covered Calls Advisor Portfolio is not identical to the advisor's personal portfolio. However, it does provide a comparable overall portfolio return result since all equities in the CCAP are also held in this advisor's personal portfolio. To ensure comparability, all transaction dates and transaction prices herein are identical to those that were established in the Covered Calls Advisor's personal portfolio. The primary difference between the two accounts is the total number of shares held for each equity. This approach is used to preserve the confidentiality of the total value of the Covered Call Advisor's personal portfolio.
The Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent'. Here's an example to aid understanding of how the overall portfolio performance is determined: If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100. As shown in the right sidebar near the top of this page, the Covered Calls Advisor's current Overall Market Meter rating remains "SLIGHTLY BULLISH". The corresponding investing strategy is to, on-average, sell 2% out-of-the-money covered calls for the nearest expiration month.
If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.
Regards and Godspeed,
Jeff
Wednesday, October 26, 2011
Sold 100% Cash-Secured Puts -- Citigroup
Today, the Covered Calls Advisor established new 100% Cash-Secured Puts positions in Bunge Ltd, Citigroup, Halliburton, and Morgan Stanley; each with Nov2011 expirations. The Covered Calls Advisor does not use margin, so the detailed information on these positions and some potential results shown below reflect the fact that these positions were established using 100% cash securitization for all four of these short put option positions.
1. Bunge Ltd.(BG) -- New Position
The transaction was as follows:
10/26/2011 Sold 3 Bunge Ltd.(BG) Nov2011 $60.00 Put Options @ $3.10
Note: the price of BG stock was $58.62 today when these puts were sold.
Two possible overall performance results(including commissions) for this Bunge Ltd.(BG)transaction would be as follows:
100% Cash-Secured Cost Basis: $18,000.00
= $60.00*300
Net Profit:
(a) Options Income: +$918.80
= ($3.10*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $58.62 and thus stock assigned at $60.00 at expiration): -$422.95
= ($58.62-$60.00)*300 - $8.95 commissions
(c) Capital Appreciation (If BG stock above $60.00 at Nov2011 expiration): +$0.00
= ($60.00-$60.00) -$0.00 commissions
Total Net Profit(If stock price unchanged at $58.62): +$495.85
= (+$918.80 +$0.00 -$422.95)
Total Net Profit(If stock price above $60.00 at Nov2011 options expiration): +$918.80
= (+$918.80 +$0.00 +$0.00)
1. Absolute Return if Unchanged at $58.62: +2.8%
= +$495.85/$18,000.00
Annualized Return If Unchanged (ARIU): +41.9%
= (+$495.85/$18,000.00)*(365/24 days)
2. Absolute Return (If stock price above $60.00 at Nov2011 options expiration and put options thus expire worthless): +5.1%
= +$918.80/$18,000.00
Annualized Return (If stock price above $60.00 at expiration): +77.6%
= (+$918.80/$18,000.00)*(365/24 days)
2. Citigroup, Inc.(C) -- New Position
The transaction was as follows:
10/26/2011 Sold 3 Citigroup, Inc.(C) Nov2011 $31.00 Put Options @ $1.96
Note: the price of Citi stock was $30.42 today when these puts were sold.
Two possible overall performance results(including commissions) for this Citigroup, Inc.(C) transaction would be as follows:
100% Cash-Secured Cost Basis: $9,300.00
= $31.00*300
Net Profit:
(a) Options Income: +$576.80
= ($1.96*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $30.42 and thus stock assigned at $31.00 at expiration): -$182.95
= ($30.42-$31.00)*300 - $8.95 commissions
(c) Capital Appreciation (If Citigroup stock above $31.00 at Nov2011 expiration): +$0.00
= ($31.00-$31.00) -$0.00 commissions
Total Net Profit(If stock price unchanged at $30.42): +$393.85
= (+$576.80 +$0.00 -$182.95)
Total Net Profit(If stock price above $31.00 at Nov2011 options expiration): +$576.80
= (+$576.80 +$0.00 +$0.00)
1. Absolute Return if Unchanged at $30.42: +4.2%
= +$393.85/$9,300.00
Annualized Return If Unchanged (ARIU): +64.4%
= (+$393.85/$9,300.00)*(365/24 days)
2. Absolute Return (If stock price above $31.00 at Nov2011 options expiration and put options thus expire worthless): +6.2%
= +$576.80/$9,300.00
Annualized Return (If stock price above $31.00 at expiration): +94.3%
= (+$576.80/$9,300.00)*(365/24 days)
3. Halliburton Co.(HAL) -- New Position
The transaction was as follows:
10/26/2011 Sold 3 Halliburton Co.(HAL) Nov2011 $36.00 Put Options @ $2.06
Note: the price of HAL stock was $35.56 today when these puts were sold.
Two possible overall performance results(including commissions) for this Halliburton Co.(HAL) transaction would be as follows:
100% Cash-Secured Cost Basis: $10,800.00
= $36.00*300
Net Profit:
(a) Options Income: +$606.80
= ($2.06*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $35.56 and thus stock assigned at $36.00 at expiration): -$140.95
= ($35.56-$36.00)*300 - $8.95 commissions
(c) Capital Appreciation (If HAL stock above $36.00 at Nov2011 expiration): +$0.00
= ($36.00-$36.00) -$0.00 commissions
Total Net Profit(If stock price unchanged at $35.56): +$465.85
= (+$606.80 +$0.00 -$140.95)
Total Net Profit(If stock price above $36.00 at Nov2011 options expiration): +$606.80
= (+$606.80 +$0.00 +$0.00)
1. Absolute Return if Unchanged at $35.56: +4.3%
= +$465.85/$10,800.00
Annualized Return If Unchanged (ARIU): +65.6%
= (+$465.85/$10,800.00)*(365/24 days)
2. Absolute Return (If stock price above $36.00 at Nov2011 options expiration and put options thus expire worthless): +5.6%
= +$606.80/$10,800.00
Annualized Return (If stock price above $36.00 at expiration): +85.4%
= (+$606.80/$10,800.00)*(365/24 days)
4. Morgan Stanley (MS) -- New Position
The transaction was as follows:
10/26/2011 Sold 6 Morgan Stanley (MS) Nov2011 $17.00 Put Options @ $1.16
Note: the price of MS stock was $16.82 today when these puts were sold.
Two possible overall performance results(including commissions) for this Morgan Stanley (MS) transaction would be as follows:
100% Cash-Secured Cost Basis: $10,200.00
= $17.00*600
Net Profit:
(a) Options Income: +$682.55
= ($1.16*600 shares) - $13.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $16.82 and thus stock assigned at $17.00 at expiration): -$116.95
= ($16.82-$17.00)*600 - $8.95 commissions
(c) Capital Appreciation (If MS stock above $17.00 at Nov2011 expiration): +$0.00
= ($17.00-$17.00) -$0.00 commissions
Total Net Profit(If stock price unchanged at $16.82): +$565.60
= (+$682.55 +$0.00 -$116.95)
Total Net Profit(If stock price above $17.00 at Nov2011 options expiration): +$682.55
= (+$682.55 +$0.00 +$0.00)
1. Absolute Return if Unchanged at $16.82: +5.5%
= +$565.60/$10,200.00
Annualized Return If Unchanged (ARIU): +84.3%
= (+$565.60/$10,200.00)*(365/24 days)
2. Absolute Return (If stock price above $17.00 at Nov2011 options expiration and put options thus expire worthless): +6.7%
= +$682.55/$10,200.00
Annualized Return (If stock price above $17.00 at expiration): +101.8%
= (+$682.55/$10,200.00)*(365/24 days)
1. Bunge Ltd.(BG) -- New PositionThe transaction was as follows:
10/26/2011 Sold 3 Bunge Ltd.(BG) Nov2011 $60.00 Put Options @ $3.10
Note: the price of BG stock was $58.62 today when these puts were sold.
Two possible overall performance results(including commissions) for this Bunge Ltd.(BG)transaction would be as follows:
100% Cash-Secured Cost Basis: $18,000.00
= $60.00*300
Net Profit:
(a) Options Income: +$918.80
= ($3.10*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $58.62 and thus stock assigned at $60.00 at expiration): -$422.95
= ($58.62-$60.00)*300 - $8.95 commissions
(c) Capital Appreciation (If BG stock above $60.00 at Nov2011 expiration): +$0.00
= ($60.00-$60.00) -$0.00 commissions
Total Net Profit(If stock price unchanged at $58.62): +$495.85
= (+$918.80 +$0.00 -$422.95)
Total Net Profit(If stock price above $60.00 at Nov2011 options expiration): +$918.80
= (+$918.80 +$0.00 +$0.00)
1. Absolute Return if Unchanged at $58.62: +2.8%
= +$495.85/$18,000.00
Annualized Return If Unchanged (ARIU): +41.9%
= (+$495.85/$18,000.00)*(365/24 days)
2. Absolute Return (If stock price above $60.00 at Nov2011 options expiration and put options thus expire worthless): +5.1%
= +$918.80/$18,000.00
Annualized Return (If stock price above $60.00 at expiration): +77.6%
= (+$918.80/$18,000.00)*(365/24 days)
2. Citigroup, Inc.(C) -- New PositionThe transaction was as follows:
10/26/2011 Sold 3 Citigroup, Inc.(C) Nov2011 $31.00 Put Options @ $1.96
Note: the price of Citi stock was $30.42 today when these puts were sold.
Two possible overall performance results(including commissions) for this Citigroup, Inc.(C) transaction would be as follows:
100% Cash-Secured Cost Basis: $9,300.00
= $31.00*300
Net Profit:
(a) Options Income: +$576.80
= ($1.96*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $30.42 and thus stock assigned at $31.00 at expiration): -$182.95
= ($30.42-$31.00)*300 - $8.95 commissions
(c) Capital Appreciation (If Citigroup stock above $31.00 at Nov2011 expiration): +$0.00
= ($31.00-$31.00) -$0.00 commissions
Total Net Profit(If stock price unchanged at $30.42): +$393.85
= (+$576.80 +$0.00 -$182.95)
Total Net Profit(If stock price above $31.00 at Nov2011 options expiration): +$576.80
= (+$576.80 +$0.00 +$0.00)
1. Absolute Return if Unchanged at $30.42: +4.2%
= +$393.85/$9,300.00
Annualized Return If Unchanged (ARIU): +64.4%
= (+$393.85/$9,300.00)*(365/24 days)
2. Absolute Return (If stock price above $31.00 at Nov2011 options expiration and put options thus expire worthless): +6.2%
= +$576.80/$9,300.00
Annualized Return (If stock price above $31.00 at expiration): +94.3%
= (+$576.80/$9,300.00)*(365/24 days)
3. Halliburton Co.(HAL) -- New PositionThe transaction was as follows:
10/26/2011 Sold 3 Halliburton Co.(HAL) Nov2011 $36.00 Put Options @ $2.06
Note: the price of HAL stock was $35.56 today when these puts were sold.
Two possible overall performance results(including commissions) for this Halliburton Co.(HAL) transaction would be as follows:
100% Cash-Secured Cost Basis: $10,800.00
= $36.00*300
Net Profit:
(a) Options Income: +$606.80
= ($2.06*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $35.56 and thus stock assigned at $36.00 at expiration): -$140.95
= ($35.56-$36.00)*300 - $8.95 commissions
(c) Capital Appreciation (If HAL stock above $36.00 at Nov2011 expiration): +$0.00
= ($36.00-$36.00) -$0.00 commissions
Total Net Profit(If stock price unchanged at $35.56): +$465.85
= (+$606.80 +$0.00 -$140.95)
Total Net Profit(If stock price above $36.00 at Nov2011 options expiration): +$606.80
= (+$606.80 +$0.00 +$0.00)
1. Absolute Return if Unchanged at $35.56: +4.3%
= +$465.85/$10,800.00
Annualized Return If Unchanged (ARIU): +65.6%
= (+$465.85/$10,800.00)*(365/24 days)
2. Absolute Return (If stock price above $36.00 at Nov2011 options expiration and put options thus expire worthless): +5.6%
= +$606.80/$10,800.00
Annualized Return (If stock price above $36.00 at expiration): +85.4%
= (+$606.80/$10,800.00)*(365/24 days)
4. Morgan Stanley (MS) -- New PositionThe transaction was as follows:
10/26/2011 Sold 6 Morgan Stanley (MS) Nov2011 $17.00 Put Options @ $1.16
Note: the price of MS stock was $16.82 today when these puts were sold.
Two possible overall performance results(including commissions) for this Morgan Stanley (MS) transaction would be as follows:
100% Cash-Secured Cost Basis: $10,200.00
= $17.00*600
Net Profit:
(a) Options Income: +$682.55
= ($1.16*600 shares) - $13.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $16.82 and thus stock assigned at $17.00 at expiration): -$116.95
= ($16.82-$17.00)*600 - $8.95 commissions
(c) Capital Appreciation (If MS stock above $17.00 at Nov2011 expiration): +$0.00
= ($17.00-$17.00) -$0.00 commissions
Total Net Profit(If stock price unchanged at $16.82): +$565.60
= (+$682.55 +$0.00 -$116.95)
Total Net Profit(If stock price above $17.00 at Nov2011 options expiration): +$682.55
= (+$682.55 +$0.00 +$0.00)
1. Absolute Return if Unchanged at $16.82: +5.5%
= +$565.60/$10,200.00
Annualized Return If Unchanged (ARIU): +84.3%
= (+$565.60/$10,200.00)*(365/24 days)
2. Absolute Return (If stock price above $17.00 at Nov2011 options expiration and put options thus expire worthless): +6.7%
= +$682.55/$10,200.00
Annualized Return (If stock price above $17.00 at expiration): +101.8%
= (+$682.55/$10,200.00)*(365/24 days)
Tuesday, October 25, 2011
Establish iShares MSCI South Korea ETF Covered Calls
A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of iShares MSCI South Korea ETF (EWY) covered calls as follows:Established iShares MSCI South Korea ETF (EWY) Covered Calls for Nov2011:
10/25/2011 Bought 800 EWY @ $54.62
10/25/2011 Sold 8 EWY Nov2011 $54.00 Calls @ $2.59
Note: these call options were sold with the price of EWY at $54.62
A possible overall performance result(including commissions) for the EWY transaction would be as follows:
Stock Purchase Cost: $43,704.95
= ($54.62*800+$8.95 commission)
Net Profit:
(a) Options Income: +$2,057.05
= (800*$2.59 - $14.95 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If EWY assigned at $54.00): -$504.95
= ($54.00-$54.62)*800 - $8.95 commissions
Total Net Profit(If EWY assigned at $54.00): +$1,552.10
= (+$2,057.05 +$0.00 -$504.95)
Absolute Return if Assigned at $54.00: +3.6%
= +$1,552.10/$43,704.95
Annualized Return If Assigned (ARIA): +51.8%
= (+$1,552.10/$43,704.95)*(365/25 days)
Sold 100% Cash-Secured Puts -- Valero Energy Corp.
Today, the Covered Calls Advisor established a new 100% Cash-Secured Puts position in Valero Energy Corp.(VLO) with a Nov2011 expiration.With total capacity of approximately 3.0 million barrels per day, Valero Energy Corp. is the largest petroleum refiner and marketer in the U.S. The company has the industry's most complex and sophisticated refining system. Most of its 16 refineries throughout the U.S., Canada and Aruba are able to process heavy, low-quality crude oil. The company has a growing network of retail outlets in the Great Plains, Southwest and Northeast.
VLO rates well above the minimum total points necessary for purchase on the CCAP 'Buy Alerts' spreadsheet (See below that Total Points of 18.24 is above this advisor's required threshold of 16.0), so it was decided to establish a position in VLO with a Nov2011 expiration.
Note: Click on chart above for larger image.
Valero Energy Corp. (VLO) -- New Position
The transaction was as follows:
10/25/2011 Sold 4 Valero Energy Corp.(VLO) Nov2011 $22.00 Put Options @ $1.75
Note: the price of VLO stock was $21.26 today when these puts were sold.
The Covered Calls Advisor does not use margin, so the detailed information on this position and some potential results shown below reflect the fact that this position was established using 100% cash securitization for the four put options sold.
Two possible overall performance results(including commissions) for this Valero Energy Corp.(VLO) transaction would be as follows:
100% Cash-Secured Cost Basis: $8,800.00
= $22.00*400
Net Profit:
(a) Options Income: +$688.05
= ($1.75*400 shares) - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $21.26 and thus stock assigned at $22.00 at expiration): -$304.95
= ($21.26-$22.00)*500 - $8.95 commissions
(c) Capital Appreciation (If VLO stock above $22.00 at Nov2011 expiration): -$8.95
= ($22.00-$22.00) -$8.95 commissions
Total Net Profit(If stock price unchanged at $21.26): +$383.10
= (+$688.05 +$0.00 -$304.95)
Total Net Profit(If stock price above $22.00 at Nov2011 options expiration): +$679.10
= (+$688.05 +$0.00 -$8.95)
1. Absolute Return if Unchanged at $21.26: +4.4%
= +$383.10/$8,800.00
Annualized Return If Unchanged (ARIU): +63.6%
= (+$383.10/$8,800.00)*(365/25 days)
2. Absolute Return (If stock price above $22.00 at Nov2011 options expiration and put options thus expire worthless): +7.7%
= +$679.10/$8,800.00
Annualized Return (If stock price above $22.00 at expiration): +112.7%
= (+$679.10/$8,800.00)*(365/25 days)
Monday, October 24, 2011
Continuation Transactions -- Apple Inc., International Paper, Mylan Inc., and Peabody Energy
Upon Oct2011 options expiration last Friday, seven of the thirteen total covered calls positions in the Covered Calls Advisor Portfolio (CCAP) expired. Today, a decision was made to re-establish covered calls positions for four of these seven equities (Apple Inc., International Paper, Mylan Inc., and Peabody Energy) with Nov2011 expirations. The detailed transactions history for these positions as well as possible results for these investments are as follows:
1. Apple Inc.(AAPL) -- Continuation
The transactions history is as follows:
09/19/2011 Bought 100 shares AAPL at $396.544
09/19/2011 Sold 1 AAPL Oct2011 $410 Call Option @ $10.15
10/22/2011 Oct2011 option expired.
Note: the AAPL price was $392.87 at option expiration.
10/24/2011 Sold 1 AAPL Nov2011 $410 Call Option @ $7.20
Note: the price of AAPL was $399.10 when the option was sold.
Some possible performance results(including commissions) for these AAPL transactions are as follows:
Stock Purchase Cost: $39,663.35
= ($396.544*100+$8.95 commission)
Net Profit:
(a) Options Income: +$1,715.60
= (100*($10.15+$7.20) - 2*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $399.10): +$246.65
= ($399.10-$396.544)*100 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $410.00 at expiration): +$1,336.65
= ($410.00-$396.544)*100 - $8.95 commissions
Total Net Profit (If stock price unchanged at $399.10): +$1,962.25
= (+$1,715.60 +$0.00 +$246.65)
Total Net Profit (If stock assigned at $410.00): +$3,052.25
= (+$1,715.60 +$0.00 +$1,336.65)
1. Absolute Return (If stock price unchanged at $399.10): +4.9%
= +$1,962.25/$39,663.35
Annualized Return If Unchanged (ARIU) +29.6%
= (+$1,962.25/$39,663.35)*(365/61 days)
2. Absolute Return (If stock assigned at $410.00 strike price): +7.7%
= +$3,052.25/$39,663.35
Annualized Return If Assigned (ARIA): +46.0%
= (+$3,052.25/$39,663.35)*(365/61 days)
2. International Paper Co.(IP) -- Continuation
The transactions history is as follows:
09/19/2011 Bought 400 shares IP at $26.978
09/19/2011 Sold 4 IP Oct2011 $28 Calls @ $1.18
10/22/2011 Oct2011 options expired.
Note: the IP price was $25.93 at option expiration.
10/24/2011 Sold 4 IP Nov2011 $27.00 Call Options @ $.73
Note: the price of IP was $26.25 when the options were sold.
11/14/2011 Ex-Div $105.00 = $.2625 * 400 shares
Two possible overall performance results(including commissions) for this International Paper Co.(IP) transaction would be as follows:
Stock Purchase Cost: $10,800.15
= ($26.978*400+$8.95 commission)
Net Profit:
(a) Options Income: +$740.10
= (400*($1.18+$.73) - 2*$11.95 commissions)
(b) Dividend Income: +$105.00 = $.2625 * 400 shares
(c) Capital Appreciation (If stock unchanged at $26.25 at expiration): -$300.15
= ($26.25-$26.978)*400 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $27.00): -$.15
= ($27.00-$26.978)*400 - $8.95 commissions
Total Net Profit (If stock price unchanged at expiration): +$544.95
= (+$740.10 +$105.00 -$300.15)
Total Net Profit (If stock assigned at $28.00): +$844.95
= (+$740.10 +$105.00 -$.15)
1. Absolute Return (If stock unchanged at $26.25 at expiration): +5.0%
= +$544.95/$10,800.15
Annualized Return (If stock unchanged at expiration): +30.2%
= (+$544.95/$10,800.15)*(365/61 days)
2. Absolute Return (If stock assigned at $27.00 at expiration): +7.8%
= +$844.95/$10,800.15
Annualized Return (If stock assigned at $27.00): +46.8%
= (+$844.95/$10,800.15)*(365/61 days)
3. Mylan Inc. -- Continuation
The transactions history is as follows:
07/18/2011 Sold 5 Mylan Inc. (MYL) Aug2011 $23.00 Put Options @ $1.06
Note: the price of MYL stock was $22.98 today when these puts were sold.
08/20/2011 Aug2011 MYL options exercised and stock purchased at $23.00 per share.
08/22/2011 Sold 5 MYL Sep2011 $22.00 Calls @ $.46
09/17/2011 Sep2011 MYL options expired.
09/20/2011 Sold 5 MYL Oct2011 $22.00 Calls @ $.63
Note: The price of MYL was $20.48 when these call options were sold.
10/22/2011 Oct2011 options expired.
Note: the MYL price was $18.04 at option expiration.
10/24/2011 Sold 4 IP Nov2011 $19.00 Call Options @ $.56
Note: the price of MYL was $18.08 when the options were sold.
Two possible overall performance results(including commissions) for the Mylan Inc. transactions would be as follows:
Stock Purchase Cost: $11,508.95
= ($23.00*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,304.20
= 500*($1.06+$.46+$.63+$.56) - 4*$12.70 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If MYL unchanged at $18.08):
-$2,468.95 = ($18.08-$23.00)*500 - $8.95 commissions
(c) Capital Appreciation (If MYL exercised at $19.00): -$2,008.95
= ($19.00-$23.00)*500 - $8.95 commissions
Total Net Profit(If MYL unchanged at $18.08): -$1,164.75
= (+$1,304.20 +$0.00 -$2,468.95)
Total Net Profit(If MYL exercised at $19.00): -$704.75
= (+$1,304.20 +$0.00 -$2,008.95)
1. Absolute Return if Unchanged at $18.08: -10.1%
= -$1,164.75/$11,508.95
Annualized Return If Unchanged (ARIU): -29.8%
= (-$1,164.75/$11,508.95)*(365/124 days)
2. Absolute Return if Assigned at $19.00: -6.1%
= -$704.75/$11,508.95
Annualized Return If Assigned (ARIA): -18.0%
= (-$704.75/$11,508.95)*(365/124 days)
4. Peabody Energy Corp.(BTU) -- Continuation
The transactions history is as follows:
09/19/2011 Bought 300 shares BTU at $44.208
09/19/2011 Sold 3 BTU Oct2011 $47 Calls @ $1.67
10/22/2011 Oct2011 options expired.
Note: the BTU price was $38.89 at option expiration.
10/24/2011 Sold 3 BTU Nov2011 $41.00 Call Options @ $1.85
Note: the price of BTU was $40.40 when the options were sold.
Two possible overall performance results(including commissions) for this Peabody Energy Corp.(BTU) transaction would be as follows:
Stock Purchase Cost: $13,271.35
= ($44.208*300+$8.95 commission)
Net Profit:
(a) Options Income: +$1,033.60
= (300*($1.67+$1.85) - 2*$11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation (If stock unchanged at $40.40 at expiration): -$1,151.35
= ($40.40-$44.208)*300 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $41.00): -$971.35
= ($41.00-$44.208)*300 - $8.95 commissions
Total Net Profit (If stock price unchanged at $40.40 at expiration): -$117.75
= (+$1,033.60 +$0.00 -$1,151.35)
Total Net Profit (If stock assigned at $41.00): +$62.25
= (+$1,033.60 +$0.00 -$971.35)
1. Absolute Return (If stock unchanged at $40.40 at expiration): -0.9%
= -$117.75/$13,271.35
Annualized Return (If stock unchanged at expiration): -5.3%
= (-$117.75/$13,271.35)*(365/61 days)
2. Absolute Return (If stock assigned at $41.00 at expiration): +0.5%
= +$62.25/$13,271.35
Annualized Return (If stock assigned at $41.00): +2.8%
= (+$62.25/$13,271.35)*(365/61 days)
1. Apple Inc.(AAPL) -- Continuation
The transactions history is as follows:
09/19/2011 Bought 100 shares AAPL at $396.544
09/19/2011 Sold 1 AAPL Oct2011 $410 Call Option @ $10.15
10/22/2011 Oct2011 option expired.
Note: the AAPL price was $392.87 at option expiration.
10/24/2011 Sold 1 AAPL Nov2011 $410 Call Option @ $7.20
Note: the price of AAPL was $399.10 when the option was sold.
Some possible performance results(including commissions) for these AAPL transactions are as follows:
Stock Purchase Cost: $39,663.35
= ($396.544*100+$8.95 commission)
Net Profit:
(a) Options Income: +$1,715.60
= (100*($10.15+$7.20) - 2*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $399.10): +$246.65
= ($399.10-$396.544)*100 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $410.00 at expiration): +$1,336.65
= ($410.00-$396.544)*100 - $8.95 commissions
Total Net Profit (If stock price unchanged at $399.10): +$1,962.25
= (+$1,715.60 +$0.00 +$246.65)
Total Net Profit (If stock assigned at $410.00): +$3,052.25
= (+$1,715.60 +$0.00 +$1,336.65)
1. Absolute Return (If stock price unchanged at $399.10): +4.9%
= +$1,962.25/$39,663.35
Annualized Return If Unchanged (ARIU) +29.6%
= (+$1,962.25/$39,663.35)*(365/61 days)
2. Absolute Return (If stock assigned at $410.00 strike price): +7.7%
= +$3,052.25/$39,663.35
Annualized Return If Assigned (ARIA): +46.0%
= (+$3,052.25/$39,663.35)*(365/61 days)
2. International Paper Co.(IP) -- Continuation
The transactions history is as follows:
09/19/2011 Bought 400 shares IP at $26.978
09/19/2011 Sold 4 IP Oct2011 $28 Calls @ $1.18
10/22/2011 Oct2011 options expired.
Note: the IP price was $25.93 at option expiration.
10/24/2011 Sold 4 IP Nov2011 $27.00 Call Options @ $.73
Note: the price of IP was $26.25 when the options were sold.
11/14/2011 Ex-Div $105.00 = $.2625 * 400 shares
Two possible overall performance results(including commissions) for this International Paper Co.(IP) transaction would be as follows:
Stock Purchase Cost: $10,800.15
= ($26.978*400+$8.95 commission)
Net Profit:
(a) Options Income: +$740.10
= (400*($1.18+$.73) - 2*$11.95 commissions)
(b) Dividend Income: +$105.00 = $.2625 * 400 shares
(c) Capital Appreciation (If stock unchanged at $26.25 at expiration): -$300.15
= ($26.25-$26.978)*400 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $27.00): -$.15
= ($27.00-$26.978)*400 - $8.95 commissions
Total Net Profit (If stock price unchanged at expiration): +$544.95
= (+$740.10 +$105.00 -$300.15)
Total Net Profit (If stock assigned at $28.00): +$844.95
= (+$740.10 +$105.00 -$.15)
1. Absolute Return (If stock unchanged at $26.25 at expiration): +5.0%
= +$544.95/$10,800.15
Annualized Return (If stock unchanged at expiration): +30.2%
= (+$544.95/$10,800.15)*(365/61 days)
2. Absolute Return (If stock assigned at $27.00 at expiration): +7.8%
= +$844.95/$10,800.15
Annualized Return (If stock assigned at $27.00): +46.8%
= (+$844.95/$10,800.15)*(365/61 days)
3. Mylan Inc. -- Continuation
The transactions history is as follows:
07/18/2011 Sold 5 Mylan Inc. (MYL) Aug2011 $23.00 Put Options @ $1.06
Note: the price of MYL stock was $22.98 today when these puts were sold.
08/20/2011 Aug2011 MYL options exercised and stock purchased at $23.00 per share.
08/22/2011 Sold 5 MYL Sep2011 $22.00 Calls @ $.46
09/17/2011 Sep2011 MYL options expired.
09/20/2011 Sold 5 MYL Oct2011 $22.00 Calls @ $.63
Note: The price of MYL was $20.48 when these call options were sold.
10/22/2011 Oct2011 options expired.
Note: the MYL price was $18.04 at option expiration.
10/24/2011 Sold 4 IP Nov2011 $19.00 Call Options @ $.56
Note: the price of MYL was $18.08 when the options were sold.
Two possible overall performance results(including commissions) for the Mylan Inc. transactions would be as follows:
Stock Purchase Cost: $11,508.95
= ($23.00*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,304.20
= 500*($1.06+$.46+$.63+$.56) - 4*$12.70 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If MYL unchanged at $18.08):
-$2,468.95 = ($18.08-$23.00)*500 - $8.95 commissions
(c) Capital Appreciation (If MYL exercised at $19.00): -$2,008.95
= ($19.00-$23.00)*500 - $8.95 commissions
Total Net Profit(If MYL unchanged at $18.08): -$1,164.75
= (+$1,304.20 +$0.00 -$2,468.95)
Total Net Profit(If MYL exercised at $19.00): -$704.75
= (+$1,304.20 +$0.00 -$2,008.95)
1. Absolute Return if Unchanged at $18.08: -10.1%
= -$1,164.75/$11,508.95
Annualized Return If Unchanged (ARIU): -29.8%
= (-$1,164.75/$11,508.95)*(365/124 days)
2. Absolute Return if Assigned at $19.00: -6.1%
= -$704.75/$11,508.95
Annualized Return If Assigned (ARIA): -18.0%
= (-$704.75/$11,508.95)*(365/124 days)
4. Peabody Energy Corp.(BTU) -- Continuation
The transactions history is as follows:
09/19/2011 Bought 300 shares BTU at $44.208
09/19/2011 Sold 3 BTU Oct2011 $47 Calls @ $1.67
10/22/2011 Oct2011 options expired.
Note: the BTU price was $38.89 at option expiration.
10/24/2011 Sold 3 BTU Nov2011 $41.00 Call Options @ $1.85
Note: the price of BTU was $40.40 when the options were sold.
Two possible overall performance results(including commissions) for this Peabody Energy Corp.(BTU) transaction would be as follows:
Stock Purchase Cost: $13,271.35
= ($44.208*300+$8.95 commission)
Net Profit:
(a) Options Income: +$1,033.60
= (300*($1.67+$1.85) - 2*$11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation (If stock unchanged at $40.40 at expiration): -$1,151.35
= ($40.40-$44.208)*300 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $41.00): -$971.35
= ($41.00-$44.208)*300 - $8.95 commissions
Total Net Profit (If stock price unchanged at $40.40 at expiration): -$117.75
= (+$1,033.60 +$0.00 -$1,151.35)
Total Net Profit (If stock assigned at $41.00): +$62.25
= (+$1,033.60 +$0.00 -$971.35)
1. Absolute Return (If stock unchanged at $40.40 at expiration): -0.9%
= -$117.75/$13,271.35
Annualized Return (If stock unchanged at expiration): -5.3%
= (-$117.75/$13,271.35)*(365/61 days)
2. Absolute Return (If stock assigned at $41.00 at expiration): +0.5%
= +$62.25/$13,271.35
Annualized Return (If stock assigned at $41.00): +2.8%
= (+$62.25/$13,271.35)*(365/61 days)
Closed -- Alcoa Inc.
The Oct2011 covered calls position in Alcoa Inc.(AA) expired last Friday. Today, a decision was made to sell the 500 shares in the Covered Calls Advisor Portfolio. The detailed transactions history and associated results for this AA position are as follows:
The transactions history for the Alcoa Inc.(AA) position:
08/26/2011 Bought 500 AA @ $11.49
08/26/2011 Sold 5 AA Sep2011 $12.00 Calls @ $.42
Note: the price of AA was $11.60 when the call options were sold.
09/17/2011 Sep2011 options expired.
09/20/2011 Sold 5 AA Oct2011 $11.00 Calls @ $.82
Note: the price of AA was $11.48 when the call options were sold.
10/22/2011 Oct2011 options expired.
Note: the price of AA was $10.23 at options expiration.
10/24/2011 Sold 500 AA @ $10.49
The overall performance result (including commissions) for the Alcoa Inc.(AA) transactions was as follows:
Stock Purchase Cost: $5,753.95
= ($11.49*500+$8.95 commission)
Net Profit:
(a) Options Income: +$594.60
= (500*($.42+$.82) - 2*$12.70 commissions)
(b) Dividend Income: +$15.00 = $.03 * 500 shares
(c) Capital Appreciation (AA sold at $10.49): -$508.95
= ($10.49-$11.49)*500 - $8.95 commissions
Total Net Profit (AA sold at $10.49): +$100.65
= (+$594.60 +$15.00 -$508.95)
Absolute Return (AA sold at $10.49): +1.7%
= +$100.65/$5,753.95
Annualized Return: +10.8%
= (+$100.65/$5,753.95)*(365/59 days)
The transactions history for the Alcoa Inc.(AA) position:
08/26/2011 Bought 500 AA @ $11.49
08/26/2011 Sold 5 AA Sep2011 $12.00 Calls @ $.42
Note: the price of AA was $11.60 when the call options were sold.
09/17/2011 Sep2011 options expired.
09/20/2011 Sold 5 AA Oct2011 $11.00 Calls @ $.82
Note: the price of AA was $11.48 when the call options were sold.
10/22/2011 Oct2011 options expired.
Note: the price of AA was $10.23 at options expiration.
10/24/2011 Sold 500 AA @ $10.49
The overall performance result (including commissions) for the Alcoa Inc.(AA) transactions was as follows:
Stock Purchase Cost: $5,753.95
= ($11.49*500+$8.95 commission)
Net Profit:
(a) Options Income: +$594.60
= (500*($.42+$.82) - 2*$12.70 commissions)
(b) Dividend Income: +$15.00 = $.03 * 500 shares
(c) Capital Appreciation (AA sold at $10.49): -$508.95
= ($10.49-$11.49)*500 - $8.95 commissions
Total Net Profit (AA sold at $10.49): +$100.65
= (+$594.60 +$15.00 -$508.95)
Absolute Return (AA sold at $10.49): +1.7%
= +$100.65/$5,753.95
Annualized Return: +10.8%
= (+$100.65/$5,753.95)*(365/59 days)
October 2011 Expiration Results
The Covered Calls Advisor Portfolio (CCAP) contained a total of thirteen covered calls positions with October 2011 expirations, with the following results:
- Seven covered calls positions in the CCAP (Alcoa Inc., Apple Inc., International Paper, iShares MSCI Emerging Markets ETF, iShares MSCI China ETF, Mylan Inc., and Peabody Energy Corp.) expired out-of-the-money. Decisions will be made to either sell these equities, or to keep them and sell calls to establish November 2011 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.
- Six covered calls positions (General Motors Co., iShares MSCI South Korea ETF, Microsoft Corp., Morgan Stanley, ProShares UltraShort Barclays 20+ Year Treasury ETF, and Valero Energy Co.) were in-the-money and the stocks were assigned (i.e. stock called away) upon option expiration last Friday. The detailed history for these closed positions is as follows:
1. General Motors Co.(GM) -- Closed
The transactions history is as follows:
07/20/2011 Bought 300 GM @ $29.32
07/20/2011 Sold 3 GM Aug2011 $30.00 Calls @ $.79
Note: the price of GM was $29.45 when the call options were sold.
08/20/2011 Aug2011 GM options expired.
08/22/2011 Sold 3 GM Sep2011 $24.00 Calls @ $.65
09/17/2011 Sep2011 GM options expired.
09/20/2011 Sold 3 GM Oct2011 $24.00 Calls @ $.57
Note: The price of GM was $22.80 when the options were sold.
10/22/2011 Sold 300 GM shares at $24.00 at Oct2011 expiration.
Note: The price of GM was $24.35 when the call options were assigned.
The performance results(including commissions) for these GM transactions are as follows:
Stock Purchase Cost: $8,804.95
= ($29.32*300+$8.95 commission)
Net Profit:
(a) Options Income: +$537.90
= (300*($.70+$.65+$.57) - 3*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $24.00 at expiration): -$1,604.95
= ($24.00-$29.32)*300 - $8.95 commissions
Total Net Profit (Stock assigned at $24.00): -$1,067.05
= (+$537.90 +$0.00 -$1,604.95)
Absolute Return (Stock assigned at $24.00 strike price): -12.1%
= -$1,067.05/$8,804.95
Annualized Return: -71.3%
= (-$1,067.05/$8,804.95)*(365/62 days)
2. iShares MSCI South Korea ETF (EWY) -- Closed
The transactions history is as follows:
07/18/2011 Bought 500 EWY @ $64.76
07/18/2011 Sold 5 EWY Aug2011 $66.00 Calls @ $1.45
Note: The price of EWY was $64.80 when the options were sold.
08/20/2011 Aug2011 options expired.
08/29/2011 Sold 5 EWY Sep2011 $56.00 Calls @ $1.36
09/17/2011 Sep2011 EWY options expired.
09/20/2011 Sold 5 EWY Oct2011 $50.00 Calls @ $3.74
10/22/2011 Sold 500 EWY shares at $50.00 at Oct2011 expiration.
Note: The price of EWT was $52.98 when the call options were assigned.
The performance results(including commissions) for these EWY transactions are as follows:
Stock Purchase Cost: $32,388.95
= ($64.76*500+$8.95 commission)
Net Profit:
(a) Options Income: +$3,236.90
= (500*($1.45+$1.36+$3.74) - 3*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $50.00 at expiration): -$7,388.95
= ($50.00-$64.76)*500 - $8.95 commissions
Total Net Profit (Stock assigned at $50.00): -$4,152.05
= (+$3,236.90 +$0.00 -$7,388.95)
Absolute Return (Stock assigned at $50.00 strike price): -12.8%
= -$4,152.05/$32,388.95
Annualized Return: -48.7%
= (-$4,152.05/$32,388.95)*(365/96 days)
3. Microsoft Corp.(MSFT) -- Closed
The transactions history is as follows:
01/24/2011 Bought 700 MSFT @ $28.15
02/17/2011 Ex-Dividend Date $112.00 = $.16 per share x 700 shares
01/24/2011 Sell-to-Open(STO) 7 MSFT Feb2011 $29.00 CallS @ $.40
02/19/2011 Feb 2011 Options Expired
03/21/2011 Sell-to-Open(STO) 7 MSFT Apr2011 $26.00 Calls @ $.31
Note: the price of MSFT was $25.47 today when the options were sold.
04/16/2011 Apr2011 MSFT options expired.
04/26/2011 Sold 7 MSFT May2011 $26.00 Calls @ $.66
Note: The price of MSFT was $26.06 when these call options were sold.
05/17/2011 Ex-Dividend Date $112.00 = $.16 per share x 700 shares
05/31/2011 Sold 7 MSFT Jul2011 $26.00 Calls @ $.29
Note: The price of MSFT was $25.05 when these call options were sold.
07/14/2011 Buy-to-Close (BTC) 7 MSFT Jul2011 $26.00 Call Options @ $.50
07/14/2011 Sell-to-Open (STO) 7 MSFT Aug2011 $27.00 Call Options @ $.56
Note: The price of MSFT was $26.52 when these call options were sold.
08/17/2011 Ex-Dividend Date $112.00 = $.16 per share x 700 shares
08/20/2011 Aug2011 options expired.
08/29/2011 Sold 7 MSFT Sep2011 $26.00 Calls @ $.58
09/17/2011 Sep2011 MSFT options expired.
09/20/2011 Sold 7 MSFT Oct2011 $26.00 Calls @ $.41
10/22/2011 10/22/2011 Sold 700 MSFT shares at $26.00 at Oct2011 expiration.
Note: The price of MSFT was $27.16 when the call options were assigned.
The performance results(including commissions) for these MSFT transactions are as follows:
Stock Purchase Cost: $19,713.95
= ($28.15*700+$8.95 commission)
Net Profit:
(a) Options Income: +$2,483.40
= (700*($.40+$.31+$.66+$.29+$.50+$56+$.58+$.41) - 8*$14.20 commissions)
(b) Dividend Income: +$336.00 ($.16*700 shares * 3 dividend payouts)
(c) Capital Appreciation (Stock assigned at $26.00 at expiration): -$1,513.95
= ($26.00-$28.15)*700 - $8.95 commissions
Total Net Profit (Stock assigned at $26.00): +$1,305.45
= (+$2,483.40 +$336.00 -$1,513.95)
Absolute Return (Stock assigned at $26.00 strike price): +6.6%
= +$1,305.45/$19,713.95
Annualized Return: +8.9%
= (-$4,152.05/$32,388.95)*(365/271 days)
4. Morgan Stanley (MS) -- Closed
The transactions history is as follows:
06/03/2011 Bought 300 MS @ $22.988
06/03/2011 Sold 3 MS Jul2011 $25.00 Calls @ $.26
Note: the price of MS was $23.14 when the call options were sold.
07/16/2011 Jul2011 MS options expired.
07/18/2011 Sold 3 MS Sep2011 $22.00 Calls @$.66
Note: The price of MS was $20.82 when these call options were sold.
07/27/2011 Ex-Dividend of $.05 per share
09/17/2011 Sep2011 MS options expired.
09/20/2011 Sold 3 MS Oct2011 $17.00 Calls @ $.42
Note: The price of MS was $15.41 when these call options were sold.
10/22/2011 Sold 300 MS shares at $17.00 at Oct2011 expiration.
Note: The price of MS was $17.02 when the call options were assigned.
Two possible overall performance results(including commissions) for the Morgan Stanley transactions would be as follows:
Stock Purchase Cost: $6,905.35
= ($22.988*300+$8.95 commission)
Net Profit:
(a) Options Income: +$276.40
= 300*($.26+$.66+$.42) - 3*$11.20 commissions
(b) Dividend Income: +$15.00 = $.05 * 300 shares
(c) Capital Appreciation (If MS exercised at $17.00): -$1,805.35
= ($17.00-$22.988)*300 - $8.95 commissions
Total Net Profit(MS assigned at $17.00): -$1,513.95
= (+$276.40 +$15.00 -$1,805.35)
Absolute Return (Stock Assigned at $17.00): -21.9%
= -$1,513.95/$6,905.35
Annualized Return: -56.8%
= (-$1,513.95/$6,905.35)*(365/141 days)
5. ProShares UltraShort Barclays 20+ Year Treasury ETF (TBT) -- Closed
The transactions history is as follows:
05/02/2011 Bought 200 TBT @ $35.75
05/02/2011 Sold 2 TBT May2011 $37.00 Calls @ $.36
05/21/2011 May2011 Options Expired
Note: the price of TBT was $34.16 upon options expiration.
06/28/2011 Sold 2 TBT Jul2011 $35.00 Calls @ $.39
Note: price of TBT was $33.94 when these options were sold.
07/16/2011 Jul2011 TBT options expired.
07/21/2011 Sold 2 TBT Aug2011 $34.00 Calls @$.77
Note: The price of TBT was $33.28 when these call options were sold.
08/20/2011 Aug2011 options expired.
08/29/2011 Sold 2 TBT Sep2011 $25.00 Calls @ $1.58
09/17/2011 Sep2011 TBT options expired.
09/20/2011 Sold 2 TBT Oct2011 $21.00 Calls @ $1.67
10/22/2011 10/22/2011 Sold 200 TBT shares at $21.00 at Oct2011 expiration.
Note: The price of TBT was $21.83 when the call options were assigned.
The performance results(including commissions) for these TBT transactions are as follows:
Stock Purchase Cost: $7,158.95
= ($35.75*200+$8.95 commission)
Net Profit:
(a) Options Income: +$933.10
= (200*($.36+$.39+$.77+$1.58+$1.67) - 2*$10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $21.00 at expiration): -$2,958.95
= ($21.00-$35.75)*200 - $8.95 commissions
Total Net Profit (Stock assigned at $21.00): -$2,025.85
= (+$933.10 +$0.00 -$2,958.95)
Absolute Return (Stock assigned at $21.00 strike price): -59.7%
= -$2,025.85/$7,158.95
Annualized Return: +8.9%
= (-$2,025.85/$7,158.95)*(365/173 days)
6. Valero Energy Corp.(VLO) -- Closed
The transactions history is as follows:
09/20/2011 Bought 300 VLO @ $21.30
09/20/2011 Sold 3 VLO Oct2011 $23.00 Calls @ $.62
10/22/2011 Sold 300 VLO shares at $23.00 at Oct2011 expiration.
Note: The price of VLO was $23.68 when the call options were assigned.
The performance results(including commissions) for these VLO transactions are as follows:
Stock Purchase Cost: $6,398.95
= ($21.30*300+$8.95 commission)
Net Profit:
(a) Options Income: +$174.80
= ($.62*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (VLO assigned $23.00 at Oct2011 expiration): +$501.05
+($23.00-$21.30)*300 - $8.95 commissions
Total Net Profit(VLO stock assigned at $23.00 at Oct2011 options expiration): +$675.85
= (+$174.80 +$0.00 +$501.05)
Absolute Return (Stock assigned at $23.00 at Oct2011 options expiration):
+10.6% = +$675.85/$6,398.95
Annualized Return: +120.5%
= (+$675.85/$6,398.95)*(365/32 days)
- Seven covered calls positions in the CCAP (Alcoa Inc., Apple Inc., International Paper, iShares MSCI Emerging Markets ETF, iShares MSCI China ETF, Mylan Inc., and Peabody Energy Corp.) expired out-of-the-money. Decisions will be made to either sell these equities, or to keep them and sell calls to establish November 2011 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.
- Six covered calls positions (General Motors Co., iShares MSCI South Korea ETF, Microsoft Corp., Morgan Stanley, ProShares UltraShort Barclays 20+ Year Treasury ETF, and Valero Energy Co.) were in-the-money and the stocks were assigned (i.e. stock called away) upon option expiration last Friday. The detailed history for these closed positions is as follows:
1. General Motors Co.(GM) -- Closed
The transactions history is as follows:
07/20/2011 Bought 300 GM @ $29.32
07/20/2011 Sold 3 GM Aug2011 $30.00 Calls @ $.79
Note: the price of GM was $29.45 when the call options were sold.
08/20/2011 Aug2011 GM options expired.
08/22/2011 Sold 3 GM Sep2011 $24.00 Calls @ $.65
09/17/2011 Sep2011 GM options expired.
09/20/2011 Sold 3 GM Oct2011 $24.00 Calls @ $.57
Note: The price of GM was $22.80 when the options were sold.
10/22/2011 Sold 300 GM shares at $24.00 at Oct2011 expiration.
Note: The price of GM was $24.35 when the call options were assigned.
The performance results(including commissions) for these GM transactions are as follows:
Stock Purchase Cost: $8,804.95
= ($29.32*300+$8.95 commission)
Net Profit:
(a) Options Income: +$537.90
= (300*($.70+$.65+$.57) - 3*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $24.00 at expiration): -$1,604.95
= ($24.00-$29.32)*300 - $8.95 commissions
Total Net Profit (Stock assigned at $24.00): -$1,067.05
= (+$537.90 +$0.00 -$1,604.95)
Absolute Return (Stock assigned at $24.00 strike price): -12.1%
= -$1,067.05/$8,804.95
Annualized Return: -71.3%
= (-$1,067.05/$8,804.95)*(365/62 days)
2. iShares MSCI South Korea ETF (EWY) -- Closed
The transactions history is as follows:
07/18/2011 Bought 500 EWY @ $64.76
07/18/2011 Sold 5 EWY Aug2011 $66.00 Calls @ $1.45
Note: The price of EWY was $64.80 when the options were sold.
08/20/2011 Aug2011 options expired.
08/29/2011 Sold 5 EWY Sep2011 $56.00 Calls @ $1.36
09/17/2011 Sep2011 EWY options expired.
09/20/2011 Sold 5 EWY Oct2011 $50.00 Calls @ $3.74
10/22/2011 Sold 500 EWY shares at $50.00 at Oct2011 expiration.
Note: The price of EWT was $52.98 when the call options were assigned.
The performance results(including commissions) for these EWY transactions are as follows:
Stock Purchase Cost: $32,388.95
= ($64.76*500+$8.95 commission)
Net Profit:
(a) Options Income: +$3,236.90
= (500*($1.45+$1.36+$3.74) - 3*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $50.00 at expiration): -$7,388.95
= ($50.00-$64.76)*500 - $8.95 commissions
Total Net Profit (Stock assigned at $50.00): -$4,152.05
= (+$3,236.90 +$0.00 -$7,388.95)
Absolute Return (Stock assigned at $50.00 strike price): -12.8%
= -$4,152.05/$32,388.95
Annualized Return: -48.7%
= (-$4,152.05/$32,388.95)*(365/96 days)
3. Microsoft Corp.(MSFT) -- Closed
The transactions history is as follows:
01/24/2011 Bought 700 MSFT @ $28.15
02/17/2011 Ex-Dividend Date $112.00 = $.16 per share x 700 shares
01/24/2011 Sell-to-Open(STO) 7 MSFT Feb2011 $29.00 CallS @ $.40
02/19/2011 Feb 2011 Options Expired
03/21/2011 Sell-to-Open(STO) 7 MSFT Apr2011 $26.00 Calls @ $.31
Note: the price of MSFT was $25.47 today when the options were sold.
04/16/2011 Apr2011 MSFT options expired.
04/26/2011 Sold 7 MSFT May2011 $26.00 Calls @ $.66
Note: The price of MSFT was $26.06 when these call options were sold.
05/17/2011 Ex-Dividend Date $112.00 = $.16 per share x 700 shares
05/31/2011 Sold 7 MSFT Jul2011 $26.00 Calls @ $.29
Note: The price of MSFT was $25.05 when these call options were sold.
07/14/2011 Buy-to-Close (BTC) 7 MSFT Jul2011 $26.00 Call Options @ $.50
07/14/2011 Sell-to-Open (STO) 7 MSFT Aug2011 $27.00 Call Options @ $.56
Note: The price of MSFT was $26.52 when these call options were sold.
08/17/2011 Ex-Dividend Date $112.00 = $.16 per share x 700 shares
08/20/2011 Aug2011 options expired.
08/29/2011 Sold 7 MSFT Sep2011 $26.00 Calls @ $.58
09/17/2011 Sep2011 MSFT options expired.
09/20/2011 Sold 7 MSFT Oct2011 $26.00 Calls @ $.41
10/22/2011 10/22/2011 Sold 700 MSFT shares at $26.00 at Oct2011 expiration.
Note: The price of MSFT was $27.16 when the call options were assigned.
The performance results(including commissions) for these MSFT transactions are as follows:
Stock Purchase Cost: $19,713.95
= ($28.15*700+$8.95 commission)
Net Profit:
(a) Options Income: +$2,483.40
= (700*($.40+$.31+$.66+$.29+$.50+$56+$.58+$.41) - 8*$14.20 commissions)
(b) Dividend Income: +$336.00 ($.16*700 shares * 3 dividend payouts)
(c) Capital Appreciation (Stock assigned at $26.00 at expiration): -$1,513.95
= ($26.00-$28.15)*700 - $8.95 commissions
Total Net Profit (Stock assigned at $26.00): +$1,305.45
= (+$2,483.40 +$336.00 -$1,513.95)
Absolute Return (Stock assigned at $26.00 strike price): +6.6%
= +$1,305.45/$19,713.95
Annualized Return: +8.9%
= (-$4,152.05/$32,388.95)*(365/271 days)
4. Morgan Stanley (MS) -- Closed
The transactions history is as follows:
06/03/2011 Bought 300 MS @ $22.988
06/03/2011 Sold 3 MS Jul2011 $25.00 Calls @ $.26
Note: the price of MS was $23.14 when the call options were sold.
07/16/2011 Jul2011 MS options expired.
07/18/2011 Sold 3 MS Sep2011 $22.00 Calls @$.66
Note: The price of MS was $20.82 when these call options were sold.
07/27/2011 Ex-Dividend of $.05 per share
09/17/2011 Sep2011 MS options expired.
09/20/2011 Sold 3 MS Oct2011 $17.00 Calls @ $.42
Note: The price of MS was $15.41 when these call options were sold.
10/22/2011 Sold 300 MS shares at $17.00 at Oct2011 expiration.
Note: The price of MS was $17.02 when the call options were assigned.
Two possible overall performance results(including commissions) for the Morgan Stanley transactions would be as follows:
Stock Purchase Cost: $6,905.35
= ($22.988*300+$8.95 commission)
Net Profit:
(a) Options Income: +$276.40
= 300*($.26+$.66+$.42) - 3*$11.20 commissions
(b) Dividend Income: +$15.00 = $.05 * 300 shares
(c) Capital Appreciation (If MS exercised at $17.00): -$1,805.35
= ($17.00-$22.988)*300 - $8.95 commissions
Total Net Profit(MS assigned at $17.00): -$1,513.95
= (+$276.40 +$15.00 -$1,805.35)
Absolute Return (Stock Assigned at $17.00): -21.9%
= -$1,513.95/$6,905.35
Annualized Return: -56.8%
= (-$1,513.95/$6,905.35)*(365/141 days)
5. ProShares UltraShort Barclays 20+ Year Treasury ETF (TBT) -- Closed
The transactions history is as follows:
05/02/2011 Bought 200 TBT @ $35.75
05/02/2011 Sold 2 TBT May2011 $37.00 Calls @ $.36
05/21/2011 May2011 Options Expired
Note: the price of TBT was $34.16 upon options expiration.
06/28/2011 Sold 2 TBT Jul2011 $35.00 Calls @ $.39
Note: price of TBT was $33.94 when these options were sold.
07/16/2011 Jul2011 TBT options expired.
07/21/2011 Sold 2 TBT Aug2011 $34.00 Calls @$.77
Note: The price of TBT was $33.28 when these call options were sold.
08/20/2011 Aug2011 options expired.
08/29/2011 Sold 2 TBT Sep2011 $25.00 Calls @ $1.58
09/17/2011 Sep2011 TBT options expired.
09/20/2011 Sold 2 TBT Oct2011 $21.00 Calls @ $1.67
10/22/2011 10/22/2011 Sold 200 TBT shares at $21.00 at Oct2011 expiration.
Note: The price of TBT was $21.83 when the call options were assigned.
The performance results(including commissions) for these TBT transactions are as follows:
Stock Purchase Cost: $7,158.95
= ($35.75*200+$8.95 commission)
Net Profit:
(a) Options Income: +$933.10
= (200*($.36+$.39+$.77+$1.58+$1.67) - 2*$10.45 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $21.00 at expiration): -$2,958.95
= ($21.00-$35.75)*200 - $8.95 commissions
Total Net Profit (Stock assigned at $21.00): -$2,025.85
= (+$933.10 +$0.00 -$2,958.95)
Absolute Return (Stock assigned at $21.00 strike price): -59.7%
= -$2,025.85/$7,158.95
Annualized Return: +8.9%
= (-$2,025.85/$7,158.95)*(365/173 days)
6. Valero Energy Corp.(VLO) -- Closed
The transactions history is as follows:
09/20/2011 Bought 300 VLO @ $21.30
09/20/2011 Sold 3 VLO Oct2011 $23.00 Calls @ $.62
10/22/2011 Sold 300 VLO shares at $23.00 at Oct2011 expiration.
Note: The price of VLO was $23.68 when the call options were assigned.
The performance results(including commissions) for these VLO transactions are as follows:
Stock Purchase Cost: $6,398.95
= ($21.30*300+$8.95 commission)
Net Profit:
(a) Options Income: +$174.80
= ($.62*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (VLO assigned $23.00 at Oct2011 expiration): +$501.05
+($23.00-$21.30)*300 - $8.95 commissions
Total Net Profit(VLO stock assigned at $23.00 at Oct2011 options expiration): +$675.85
= (+$174.80 +$0.00 +$501.05)
Absolute Return (Stock assigned at $23.00 at Oct2011 options expiration):
+10.6% = +$675.85/$6,398.95
Annualized Return: +120.5%
= (+$675.85/$6,398.95)*(365/32 days)
Thursday, October 20, 2011
Overall Market Meter Rating Remains "Slightly Bullish"
Each month during options expiration week, the Covered Calls Advisor re-calculates the current values for each of the eight factors used to determine the "Overall Market Meter" rating. The eight factors used can be categorized as:
- macroeconomic (the first two indicators in the chart below),
- momentum (next two indicators in the chart),
- value (next three indicators), and
- growth (the last indicator).
The current Market Meter Average of 3.63 (see blue line in chart above) is slightly greater than the 3.50 of last month. The 3.63 is a Slightly Bullish rating(range from 3.5 to 4.5). Seven of the eight factors used to determine the Overall Market Meter rating remained unchanged from the prior analysis last month. The only factor that changed was the Interest Rates factor, which changed from Neutral to Slightly Bullish.
As shown in the right sidebar, the covered calls investing strategy corresponding to this overall Slightly Bullish sentiment is to "on-average sell 2% out-of-the-money covered calls for the nearest expiration month." So with the October 2011 options expiration this week, newly established positions for November 2011 expiration will be established in accordance with this guideline.
Your comments or questions regarding this post (or the details related to any of the eight factors used in this model) are welcomed. Please click on the "comments" link below or email me at the address shown in the upper-right sidebar.
Regards and Godspeed,
Jeff
- macroeconomic (the first two indicators in the chart below),
- momentum (next two indicators in the chart),
- value (next three indicators), and
- growth (the last indicator).
The current Market Meter Average of 3.63 (see blue line in chart above) is slightly greater than the 3.50 of last month. The 3.63 is a Slightly Bullish rating(range from 3.5 to 4.5). Seven of the eight factors used to determine the Overall Market Meter rating remained unchanged from the prior analysis last month. The only factor that changed was the Interest Rates factor, which changed from Neutral to Slightly Bullish.
As shown in the right sidebar, the covered calls investing strategy corresponding to this overall Slightly Bullish sentiment is to "on-average sell 2% out-of-the-money covered calls for the nearest expiration month." So with the October 2011 options expiration this week, newly established positions for November 2011 expiration will be established in accordance with this guideline.
Your comments or questions regarding this post (or the details related to any of the eight factors used in this model) are welcomed. Please click on the "comments" link below or email me at the address shown in the upper-right sidebar.
Regards and Godspeed,
Jeff
Monday, October 3, 2011
Returns -- Through September 2011
1. September 2011 Year-to-Date Results:
As shown in the chart below, the Covered Calls Advisor Portfolio (CCAP) has underperformed the benchmark Russell 3000 index by 3.42 percentage points (-14.39% minus -10.97%) over the first nine months of calendar year 2011.
CCAP Absolute Return (Jan 1st through September 30th, 2011) = -14.39%
($246,089.10-$287,453.75)/$287,453.75
Benchmark Russell 3000(IWV) Absolute Return(Jan 1st through September 30th, 2011) = -10.97% = ($66.73-$74.95)/$74.95
2. Prior Years Results:
The Covered Calls Advisor Portfolio (CCAP) began in September, 2007. The annualized returns achieved each year for 2007 through 2010 compared with the Russell 3000 benchmark were as follows:
As a reminder, the Covered Calls Advisor Portfolio is not identical to the advisor's personal portfolio. However, it does provide a comparable overall portfolio return result since all equities in the CCAP are also held in this advisor's personal portfolio. To ensure comparability, all transaction dates and transaction prices herein are identical to those that were established in the Covered Calls Advisor's personal portfolio. The primary difference between the two accounts is the total number of shares held for each equity. This approach is used to preserve the confidentiality of the total value of the Covered Call Advisor's personal portfolio.
The Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent'. Here's an example to aid understanding of how the overall portfolio performance is determined: If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100. As shown in the right sidebar near the top of this page, the Covered Calls Advisor's current Overall Market Meter rating remains "SLIGHTLY BULLISH". The corresponding investing strategy is to, on-average, sell 2% out-of-the-money covered calls for the nearest expiration month.
If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.
Regards and Godspeed,
Jeff
As shown in the chart below, the Covered Calls Advisor Portfolio (CCAP) has underperformed the benchmark Russell 3000 index by 3.42 percentage points (-14.39% minus -10.97%) over the first nine months of calendar year 2011.
CCAP Absolute Return (Jan 1st through September 30th, 2011) = -14.39%
($246,089.10-$287,453.75)/$287,453.75
Benchmark Russell 3000(IWV) Absolute Return(Jan 1st through September 30th, 2011) = -10.97% = ($66.73-$74.95)/$74.95
2. Prior Years Results:
The Covered Calls Advisor Portfolio (CCAP) began in September, 2007. The annualized returns achieved each year for 2007 through 2010 compared with the Russell 3000 benchmark were as follows:
As a reminder, the Covered Calls Advisor Portfolio is not identical to the advisor's personal portfolio. However, it does provide a comparable overall portfolio return result since all equities in the CCAP are also held in this advisor's personal portfolio. To ensure comparability, all transaction dates and transaction prices herein are identical to those that were established in the Covered Calls Advisor's personal portfolio. The primary difference between the two accounts is the total number of shares held for each equity. This approach is used to preserve the confidentiality of the total value of the Covered Call Advisor's personal portfolio.
The Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent'. Here's an example to aid understanding of how the overall portfolio performance is determined: If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100. As shown in the right sidebar near the top of this page, the Covered Calls Advisor's current Overall Market Meter rating remains "SLIGHTLY BULLISH". The corresponding investing strategy is to, on-average, sell 2% out-of-the-money covered calls for the nearest expiration month.
If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.
Regards and Godspeed,
Jeff
Tuesday, September 20, 2011
Establish Valero Energy Corp. Covered Calls
A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of Valero Energy Corp.(VLO) covered calls as follows:Established Valero Energy Corp.(VLO) Covered Calls for Oct2011:
09/20/2011 Bought 300 VLO @ $21.30
09/20/2011 Sold 3 VLO Oct2011 $23.00 Calls @ $.62
With total capacity of approximately 3.0 million barrels per day, Valero Energy Corp. is the largest petroleum refiner and marketer in the U.S. The company has the industry's most complex and sophisticated refining system. Most of its 16 refineries throughout the U.S., Canada and Aruba are able to process heavy, low-quality crude oil. The company has a growing network of retail outlets in the Great Plains, Southwest and Northeast.
VLO rates above the minimum total points necessary for purchase on the CCAP 'Buy Alerts' spreadsheet (See below that Total Points of 18.24 is above this advisor's required threshold of 16.0), so it was decided to establish a covered calls position in VLO with an Oct2011 expiration.
Note: Click on chart above for larger image.
Two possible overall performance results(including commissions) for the Valero Energy Corp.(VLO) transactions would be as follows:
Stock Purchase Cost: $6,398.95
= ($21.30*300+$8.95 commission)
Net Profit:
(a) Options Income: +$174.80
= ($.62*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $21.30): -$8.95
= ($21.30-$21.30)*300 - $8.95 commissions
(c) Capital Appreciation (If VLO above $23.00 at Oct2011 expiration): +$501.05
+($23.00-$21.30)*300 - $8.95 commissions
Total Net Profit(If stock price unchanged at $21.30): +$165.85
= (+$174.80 +$0.00 -$8.95)
Total Net Profit(If stock price above $23.00 at Oct2011 options expiration): +$675.85= (+$174.80 +$0.00 +$501.05)
1. Absolute Return if Unchanged at $21.30: +2.6%
= +$165.85/$6,398.95
Annualized Return If Unchanged (ARIU): +43.6%
= (+$165.85/$6,398.95)*(365/32 days)
2. Absolute Return (If stock price above $23.00 at Oct2011 options expiration):
+10.6% = +$675.85/$6,398.95
Annualized Return (If stock price above $23.00 at expiration): +120.5%
= (+$675.85/$6,398.95)*(365/32 days)
The downside breakeven price at expiration is at $20.68 ($21.30 - $.62).
Using the Black-Scholes Options Pricing Model in the Schwab Hypothetical Options Pricing calculator, the resulting probability of making a profit (if held until Oct2011 options expiration) for this Valero Energy Corp.(VLO) covered calls position is 60.9%. This compares with a probability of profit of 52.4% for a buy-and-hold of Valero over the same time period.
Continuation Transactions -- General Motors Co., iShares MSCI China ETF, iShares MSCI Emerging Markets ETF, Morgan Stanley, and Mylan Inc.
Upon Sep2011 options expiration last Friday, ten of the fourteen total covered calls positions in the Covered Calls Advisor Portfolio (CCAP) expired. Today, a decision was made to re-establish covered calls positions for five equities (General Motors Co., iShares MSCI China ETF, iShares MSCI Emerging Markets ETF, Morgan Stanley, and Mylan Inc.) with Oct2011 expirations. The detailed transactions history for these positions as well as possible results for these investments are as follows:
1. General Motors Co.(GM) -- Continuation
The transactions history is as follows:
07/20/2011 Bought 300 GM @ $29.32
07/20/2011 Sold 3 GM Aug2011 $30.00 Calls @ $.79
Note: the price of GM was $29.45 when the call options were sold.
08/20/2011 Aug2011 GM options expired.
08/22/2011 Sold 3 GM Sep2011 $24.00 Calls @ $.65
09/17/2011 Sep2011 GM options expired.
09/20/2011 Sold 3 GM Oct2011 $24.00 Calls @ $.57
Note: The price of GM was $22.80 when the options were sold.
Some possible performance results(including commissions) for these GM transactions are as follows:
Stock Purchase Cost: $8,804.95
= ($29.32*300+$8.95 commission)
Net Profit:
(a) Options Income: +$537.90
= (300*($.70+$.65+$.57) - 3*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $22.80): -$1,964.95
= ($22.80-$29.32)*300 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $24.00 at expiration): -$1,604.95
= ($24.00-$29.32)*300 - $8.95 commissions
Total Net Profit (If stock price unchanged at $22.80): -$1,427.05
= (+$537.90 +$0.00 -$1,964.95)
Total Net Profit (If stock assigned at $24.00): -$1,067.05
= (+$537.90 +$0.00 -$1,604.95)
1. Absolute Return (If stock price unchanged at $22.80): -16.2%
= -$1,427.05/$8,804.95
Annualized Return If Assigned (ARIA) -95.4%
= (-$1,427.05/$8,804.95)*(365/62 days)
2. Absolute Return (If stock assigned at $24.00 strike price): -12.1%
= -$1,067.05/$8,804.95
Annualized Return If Assigned (ARIA): -71.3%
= (-$1,067.05/$8,804.95)*(365/62 days)
2. iShares MSCI China ETF (FXI) -- Continuation
The transactions history is as follows:
The transactions history is as follows:
04/18/2011 Bought 1,000 FXI @ $44.80
04/20/2011 Sold 10 FXI May2011 $47.00 Calls @ $.49
Note: the price of FXI was $45.88 when the calls were sold.
05/31/2011 Sold 10 FXI Jul2011 $47.00 Calls @ $.37
Note: The price of FXI was $45.18 when these call options were sold.
06/21/2011 FXI ETF distribution of $.68555 per share
07/16/2011 Jul2011 FXI options expired.
07/18/2011 Sold 10 FXI Aug2011 $42.00 Calls @$.71
08/20/2011 Aug2011 FXI options expired.
08/22/2011 Sold 10 FXI Sep2011 $42.00 Calls @ $.65
09/17/2011 Sep2011 FXI options expired.
09/20/2011 Sold 10 FXI Oct2011 $38.00 Calls @ $.47
Two possible overall performance results(including commissions) for these iShares MSCI China ETF (FXI) transactions would be as follows:
Stock Purchase Cost: $44,808.95
= ($44.80*1,000+$16.45 commission)
Net Profit:
(a) Options Income: +$2,626.50
= (1,000*($.49+$.37+$.71+$.65+$.47) - 5*$12.70 commissions)
(b) Distribution Income: $685.55 = $.68555 * 1,000 shares
(c) Capital Appreciation (If FXI price unchanged at $35.29 at expiration): -$9,518.95
= ($35.29-$44.80)*1,000 - $8.95 commissions
(c) Capital Appreciation (If FXI assigned at $38.00 at expiration): -$6,808.95
= ($38.00-$44.80)*1,000 - $8.95 commissions
Total Net Profit (If FXI price unchanged at $35.29 at expiration): -$6,206.90
= (+$2,626.50 +$685.55 -$9,518.95)
Total Net Profit (If FXI assigned at $38.00): -$2,894.85
= (+$2,626.50 +$685.55 -$6,206.90)
1. Absolute Return (If FXI unchanged at $35.29 at expiration): -13.9%
= -$6,206.90/$44,808.95
Annualized Return (If FXI unchanged at expiration): -27.0%
= (-$6,206.90/$44,808.95)*(365/187 days)
2. Absolute Return (If FXI assigned at $38.00 at expiration): -6.5%
= -$2,894.85/$44,808.95
Annualized Return If Assigned (ARIA): -12.6%
= (-$2,894.85/$44,808.95)*(365/187 days)
3. iShares MSCI Emerging Markets ETF (FXI) -- Continuation
The transactions history is as follows:
04/18/2011 Bought 500 EEM @ $47.81
04/19/2011 Sold 5 EEM May2011 $49.00 Calls @ $.83
Note: the price of EEM was $48.32 when the calls were sold.
05/27/2011 Sold 5 EEM Jun2011 $49.00 Calls @ $.44
Note: the price of EEM was $47.83 when the calls were sold.
06/18/2011 Jun2011 Options Expired
Note: the price of EEM was $45.34 upon options expiration.
6/22/2011 Distribution Income $.46092 per share.
06/28/2011 Sold 5 EEM Jul2011 $47.00 Calls @ $.62
Note: price of EEM was $46.42 when these options were sold.
07/16/2011 Jul2011 EEM options expired.
07/18/2011 Sold 5 EEM Aug2011 $47.00 Calls @$.99
Note: The price of EEM was $46.55 when these call options were sold.
08/20/2011 Aug2011 EEM options expired.
08/22/2011 Sold 5 EEM Sep2011 $42.00 Calls @ $.71
09/17/2011 Sep2011 EEM options expired.
09/20/2011 Sold 5 EEM Oct2011 $42.00 Calls @ $.63
Note: The price of EEM was $39.68 when these call options were sold.
Two possible overall performance results(including commissions) for these iShares MSCI Emerging Markets ETF (EEM) transactions would be as follows:
Stock Purchase Cost: $23,913.95
= ($47.81*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,988.80
= [500*($.83 +$.35+$.62+$.99+$.71+$.63) - 6*$12.70 commissions]
(b) Distribution Income: $230.46 = $.46092 * 500 shares
(c) Capital Appreciation (If EEM unchanged at $39.68 at expiration): -$4,073.95
= ($39.68-$47.81)*500 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $42.00): -$2,913.95
= ($42.00-$47.81)*500 - $8.95 commissions
Total Net Profit (If EEM price unchanged at $39.68 at expiration): -$1,854.69
= (+$1,988.80 +$230.46 -$4,073.95)
Total Net Profit (If EEM assigned at $42.00): -$694.69
= (+$1,988.80 +$230.46 -$2,913.95)
1. Absolute Return (If stock unchanged at $39.68 at expiration): -7.8%
= -$1,854.69/$23,913.95
Annualized Return (If stock unchanged at expiration): -15.1%
= (-$1,854.69/$23,913.95)*(365/187 days)
2. Absolute Return (If stock assigned at $42.00 at expiration): -2.9%
= -$694.69/$23,913.95
Annualized Return If Assigned (ARIA): -5.7%
= (-$694.69/$23,913.95)*(365/187 days)
4. Morgan Stanley (MS) -- Continuation
The transactions history is as follows:
06/03/2011 Bought 300 MS @ $22.988
06/03/2011 Sold 3 MS Jul2011 $25.00 Calls @ $.26
Note: the price of MS was $23.14 when the call options were sold.
07/16/2011 Jul2011 MS options expired.
07/18/2011 Sold 3 MS Sep2011 $22.00 Calls @$.66
Note: The price of MS was $20.82 when these call options were sold.
07/27/2011 Ex-Dividend of $.05 per share
09/17/2011 Sep2011 MS options expired.
09/20/2011 Sold 3 MS Oct2011 $17.00 Calls @ $.42
Note: The price of MS was $15.41 when these call options were sold.
Two possible overall performance results(including commissions) for the Morgan Stanley transactions would be as follows:
Stock Purchase Cost: $6,905.35
= ($22.988*300+$8.95 commission)
Net Profit:
(a) Options Income: +$276.40
= 300*($.26+$.66+$.42) - 3*$11.20 commissions
(b) Dividend Income: +$15.00 = $.05 * 300 shares
(c) Capital Appreciation (If MS unchanged at $15.41):
-$2,282.35 = ($15.41-$22.988)*300 - $8.95 commissions
(c) Capital Appreciation (If MS exercised at $17.00): -$1,805.35
= ($17.00-$22.988)*300 - $8.95 commissions
Total Net Profit(If MS unchanged at $15.41): -$1,990.95
= (+$276.40 +$15.00 -$2,282.35)
Total Net Profit(If MS exercised at $17.00): -$1,513.95
= (+$276.40 +$15.00 -$1,805.35)
1. Absolute Return if Unchanged at $15.41: -28.8%
= -$1,990.95/$6,905.35
Annualized Return If Unchanged (ARIU) -74.6%
= (-$1,990.95/$6,905.35)*(365/141 days)
2. Absolute Return if Assigned at $17.00: -21.9%
= -$1,513.95/$6,905.35
Annualized Return If Assigned (ARIA): -56.8%
= (-$1,513.95/$6,905.35)*(365/141 days)
5. Mylan Inc. -- Continuation
The transactions history is as follows:
07/18/2011 Sold 5 Mylan Inc. (MYL) Aug2011 $23.00 Put Options @ $1.06
Note: the price of MYL stock was $22.98 today when these puts were sold.
08/20/2011 Aug2011 MYL options exercised and stock purchased at $23.00 per share.
08/22/2011 Sold 5 MYL Sep2011 $22.00 Calls @ $.46
09/17/2011 Sep2011 MYL options expired.
09/20/2011 Sold 5 MYL Oct2011 $22.00 Calls @ $.63
Note: The price of MYL was $20.48 when these call options were sold.
Two possible overall performance results(including commissions) for the Mylan Inc. transactions would be as follows:
Stock Purchase Cost: $11,508.95
= ($23.00*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,036.90
= 500*($1.06+$.46+$.63) - 3*$12.70 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If MYL unchanged at $20.48):
-$1,268.95 = ($20.48-$23.00)*500 - $8.95 commissions
(c) Capital Appreciation (If MS exercised at $17.00): -$508.95
= ($22.00-$23.00)*500 - $8.95 commissions
Total Net Profit(If MYL unchanged at $20.48): -$232.05
= (+$1,036.90 +$0.00 -$1,268.95)
Total Net Profit(If MYL exercised at $22.00): +$527.95
= (+$1,036.90 +$0.00 -$508.95)
1. Absolute Return if Unchanged at $20.48: -2.0%
= -$232.05/$11,508.95
Annualized Return If Unchanged (ARIU) -7.7%
= (-$232.05/$11,508.95)*(365/96 days)
2. Absolute Return if Assigned at $22.00: +4.6%
= +$527.95/$11,508.95
Annualized Return If Assigned (ARIA): +17.4%
= ($527.95/$11,508.95)*(365/96 days)
1. General Motors Co.(GM) -- Continuation
The transactions history is as follows:
07/20/2011 Bought 300 GM @ $29.32
07/20/2011 Sold 3 GM Aug2011 $30.00 Calls @ $.79
Note: the price of GM was $29.45 when the call options were sold.
08/20/2011 Aug2011 GM options expired.
08/22/2011 Sold 3 GM Sep2011 $24.00 Calls @ $.65
09/17/2011 Sep2011 GM options expired.
09/20/2011 Sold 3 GM Oct2011 $24.00 Calls @ $.57
Note: The price of GM was $22.80 when the options were sold.
Some possible performance results(including commissions) for these GM transactions are as follows:
Stock Purchase Cost: $8,804.95
= ($29.32*300+$8.95 commission)
Net Profit:
(a) Options Income: +$537.90
= (300*($.70+$.65+$.57) - 3*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $22.80): -$1,964.95
= ($22.80-$29.32)*300 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $24.00 at expiration): -$1,604.95
= ($24.00-$29.32)*300 - $8.95 commissions
Total Net Profit (If stock price unchanged at $22.80): -$1,427.05
= (+$537.90 +$0.00 -$1,964.95)
Total Net Profit (If stock assigned at $24.00): -$1,067.05
= (+$537.90 +$0.00 -$1,604.95)
1. Absolute Return (If stock price unchanged at $22.80): -16.2%
= -$1,427.05/$8,804.95
Annualized Return If Assigned (ARIA) -95.4%
= (-$1,427.05/$8,804.95)*(365/62 days)
2. Absolute Return (If stock assigned at $24.00 strike price): -12.1%
= -$1,067.05/$8,804.95
Annualized Return If Assigned (ARIA): -71.3%
= (-$1,067.05/$8,804.95)*(365/62 days)
2. iShares MSCI China ETF (FXI) -- Continuation
The transactions history is as follows:
The transactions history is as follows:
04/18/2011 Bought 1,000 FXI @ $44.80
04/20/2011 Sold 10 FXI May2011 $47.00 Calls @ $.49
Note: the price of FXI was $45.88 when the calls were sold.
05/31/2011 Sold 10 FXI Jul2011 $47.00 Calls @ $.37
Note: The price of FXI was $45.18 when these call options were sold.
06/21/2011 FXI ETF distribution of $.68555 per share
07/16/2011 Jul2011 FXI options expired.
07/18/2011 Sold 10 FXI Aug2011 $42.00 Calls @$.71
08/20/2011 Aug2011 FXI options expired.
08/22/2011 Sold 10 FXI Sep2011 $42.00 Calls @ $.65
09/17/2011 Sep2011 FXI options expired.
09/20/2011 Sold 10 FXI Oct2011 $38.00 Calls @ $.47
Two possible overall performance results(including commissions) for these iShares MSCI China ETF (FXI) transactions would be as follows:
Stock Purchase Cost: $44,808.95
= ($44.80*1,000+$16.45 commission)
Net Profit:
(a) Options Income: +$2,626.50
= (1,000*($.49+$.37+$.71+$.65+$.47) - 5*$12.70 commissions)
(b) Distribution Income: $685.55 = $.68555 * 1,000 shares
(c) Capital Appreciation (If FXI price unchanged at $35.29 at expiration): -$9,518.95
= ($35.29-$44.80)*1,000 - $8.95 commissions
(c) Capital Appreciation (If FXI assigned at $38.00 at expiration): -$6,808.95
= ($38.00-$44.80)*1,000 - $8.95 commissions
Total Net Profit (If FXI price unchanged at $35.29 at expiration): -$6,206.90
= (+$2,626.50 +$685.55 -$9,518.95)
Total Net Profit (If FXI assigned at $38.00): -$2,894.85
= (+$2,626.50 +$685.55 -$6,206.90)
1. Absolute Return (If FXI unchanged at $35.29 at expiration): -13.9%
= -$6,206.90/$44,808.95
Annualized Return (If FXI unchanged at expiration): -27.0%
= (-$6,206.90/$44,808.95)*(365/187 days)
2. Absolute Return (If FXI assigned at $38.00 at expiration): -6.5%
= -$2,894.85/$44,808.95
Annualized Return If Assigned (ARIA): -12.6%
= (-$2,894.85/$44,808.95)*(365/187 days)
3. iShares MSCI Emerging Markets ETF (FXI) -- Continuation
The transactions history is as follows:
04/18/2011 Bought 500 EEM @ $47.81
04/19/2011 Sold 5 EEM May2011 $49.00 Calls @ $.83
Note: the price of EEM was $48.32 when the calls were sold.
05/27/2011 Sold 5 EEM Jun2011 $49.00 Calls @ $.44
Note: the price of EEM was $47.83 when the calls were sold.
06/18/2011 Jun2011 Options Expired
Note: the price of EEM was $45.34 upon options expiration.
6/22/2011 Distribution Income $.46092 per share.
06/28/2011 Sold 5 EEM Jul2011 $47.00 Calls @ $.62
Note: price of EEM was $46.42 when these options were sold.
07/16/2011 Jul2011 EEM options expired.
07/18/2011 Sold 5 EEM Aug2011 $47.00 Calls @$.99
Note: The price of EEM was $46.55 when these call options were sold.
08/20/2011 Aug2011 EEM options expired.
08/22/2011 Sold 5 EEM Sep2011 $42.00 Calls @ $.71
09/17/2011 Sep2011 EEM options expired.
09/20/2011 Sold 5 EEM Oct2011 $42.00 Calls @ $.63
Note: The price of EEM was $39.68 when these call options were sold.
Two possible overall performance results(including commissions) for these iShares MSCI Emerging Markets ETF (EEM) transactions would be as follows:
Stock Purchase Cost: $23,913.95
= ($47.81*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,988.80
= [500*($.83 +$.35+$.62+$.99+$.71+$.63) - 6*$12.70 commissions]
(b) Distribution Income: $230.46 = $.46092 * 500 shares
(c) Capital Appreciation (If EEM unchanged at $39.68 at expiration): -$4,073.95
= ($39.68-$47.81)*500 - $8.95 commissions
(c) Capital Appreciation (If stock assigned at $42.00): -$2,913.95
= ($42.00-$47.81)*500 - $8.95 commissions
Total Net Profit (If EEM price unchanged at $39.68 at expiration): -$1,854.69
= (+$1,988.80 +$230.46 -$4,073.95)
Total Net Profit (If EEM assigned at $42.00): -$694.69
= (+$1,988.80 +$230.46 -$2,913.95)
1. Absolute Return (If stock unchanged at $39.68 at expiration): -7.8%
= -$1,854.69/$23,913.95
Annualized Return (If stock unchanged at expiration): -15.1%
= (-$1,854.69/$23,913.95)*(365/187 days)
2. Absolute Return (If stock assigned at $42.00 at expiration): -2.9%
= -$694.69/$23,913.95
Annualized Return If Assigned (ARIA): -5.7%
= (-$694.69/$23,913.95)*(365/187 days)
4. Morgan Stanley (MS) -- Continuation
The transactions history is as follows:
06/03/2011 Bought 300 MS @ $22.988
06/03/2011 Sold 3 MS Jul2011 $25.00 Calls @ $.26
Note: the price of MS was $23.14 when the call options were sold.
07/16/2011 Jul2011 MS options expired.
07/18/2011 Sold 3 MS Sep2011 $22.00 Calls @$.66
Note: The price of MS was $20.82 when these call options were sold.
07/27/2011 Ex-Dividend of $.05 per share
09/17/2011 Sep2011 MS options expired.
09/20/2011 Sold 3 MS Oct2011 $17.00 Calls @ $.42
Note: The price of MS was $15.41 when these call options were sold.
Two possible overall performance results(including commissions) for the Morgan Stanley transactions would be as follows:
Stock Purchase Cost: $6,905.35
= ($22.988*300+$8.95 commission)
Net Profit:
(a) Options Income: +$276.40
= 300*($.26+$.66+$.42) - 3*$11.20 commissions
(b) Dividend Income: +$15.00 = $.05 * 300 shares
(c) Capital Appreciation (If MS unchanged at $15.41):
-$2,282.35 = ($15.41-$22.988)*300 - $8.95 commissions
(c) Capital Appreciation (If MS exercised at $17.00): -$1,805.35
= ($17.00-$22.988)*300 - $8.95 commissions
Total Net Profit(If MS unchanged at $15.41): -$1,990.95
= (+$276.40 +$15.00 -$2,282.35)
Total Net Profit(If MS exercised at $17.00): -$1,513.95
= (+$276.40 +$15.00 -$1,805.35)
1. Absolute Return if Unchanged at $15.41: -28.8%
= -$1,990.95/$6,905.35
Annualized Return If Unchanged (ARIU) -74.6%
= (-$1,990.95/$6,905.35)*(365/141 days)
2. Absolute Return if Assigned at $17.00: -21.9%
= -$1,513.95/$6,905.35
Annualized Return If Assigned (ARIA): -56.8%
= (-$1,513.95/$6,905.35)*(365/141 days)
5. Mylan Inc. -- Continuation
The transactions history is as follows:
07/18/2011 Sold 5 Mylan Inc. (MYL) Aug2011 $23.00 Put Options @ $1.06
Note: the price of MYL stock was $22.98 today when these puts were sold.
08/20/2011 Aug2011 MYL options exercised and stock purchased at $23.00 per share.
08/22/2011 Sold 5 MYL Sep2011 $22.00 Calls @ $.46
09/17/2011 Sep2011 MYL options expired.
09/20/2011 Sold 5 MYL Oct2011 $22.00 Calls @ $.63
Note: The price of MYL was $20.48 when these call options were sold.
Two possible overall performance results(including commissions) for the Mylan Inc. transactions would be as follows:
Stock Purchase Cost: $11,508.95
= ($23.00*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,036.90
= 500*($1.06+$.46+$.63) - 3*$12.70 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If MYL unchanged at $20.48):
-$1,268.95 = ($20.48-$23.00)*500 - $8.95 commissions
(c) Capital Appreciation (If MS exercised at $17.00): -$508.95
= ($22.00-$23.00)*500 - $8.95 commissions
Total Net Profit(If MYL unchanged at $20.48): -$232.05
= (+$1,036.90 +$0.00 -$1,268.95)
Total Net Profit(If MYL exercised at $22.00): +$527.95
= (+$1,036.90 +$0.00 -$508.95)
1. Absolute Return if Unchanged at $20.48: -2.0%
= -$232.05/$11,508.95
Annualized Return If Unchanged (ARIU) -7.7%
= (-$232.05/$11,508.95)*(365/96 days)
2. Absolute Return if Assigned at $22.00: +4.6%
= +$527.95/$11,508.95
Annualized Return If Assigned (ARIA): +17.4%
= ($527.95/$11,508.95)*(365/96 days)
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