The Covered Calls Advisor Portfolio (CCAP) contained a total of eleven covered calls positions with February 2011 expirations, with the following results:
- Decisions were made earlier this week to roll-up-and-out from two existing in-the-money Feb2011 covered calls positions (Petrobras and iShares MSCI Brazil ETF) into Mar2011 positions. Separate posts were made on this blog earlier this week for each of these transactions on Friday when they occurred.
Of the remaining nine positions that were held until Feb2011 expiration this past Friday:
- Two covered calls positions (Oshkosh Corp. and Research in Motion Ltd.) finished in-the-money. The calls were exercised and the shares were called away.
The annualized return-on-investment results achieved on these two assigned positions were as follows:
1. Oshkosh Corp. -- +75.7%
2. Research in Motion -- +51.1%
- The 100% cash-secured put position in Freeport McMoRan (FCX) ended out-of-the-money and was assigned for purchase. The stock underwent a 2-for-1 split since original sale of the three FCX puts at $110.00 strike price. So the assignment was for the purchase of 600 shares of FCX stock at half of the the original $110 strike price value which is $55.00. This advisor has already decided to retain the 600 FCX shares and will sell six options agains this stock to establish Mar2011 covered calls positions. The details of these transactions (from when the put options were initially sold) will be presented in a separate FCX continuation transaction post tomorrow immediately after the six calls are sold.
- The remaining six covered calls positions in the CCAP (Apple Inc., Best Buy Corp., iShares MSCI China ETF, iShares MSCI Emerging Markets ETF, Microsoft Corp., and Sprint Corp.) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Mar2011 covered call positions. The related transactions will be made this week and the actual transactions will be posted on this blog site on the same day they occur.
The overall performance results for the two assigned Feb2011 covered calls positions were as follows:
1. Oshkosh Corp.(OSK) -- Closed
The transactions history for Oshkosh Corp.(OSK) was as follows:
01/24/2011 Bought 300 OSK @ $36.18
01/24/2011 Sell-to-Open(STO) 3 OSK Feb2011 $37.00 CallS @ $1.20
02/19/2011 Feb2011 OSK Options Expired.
Note: the price of OSK was $37.55 upon options expiration.
The overall performance results(including commissions) for the Oshkosh Corp.(OSK) transactions was as follows:
Stock Purchase Cost: $10,862.95
= ($36.18*300+$8.95 commission)
Net Profit:
(a) Options Income: +$348.80
= 300*$1.20 - $11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $37.00): +$237.05
= ($37.00-$36.18)*300 - $8.95 commissions
Total Net Profit(Stock assigned at $37.00): +$585.85
= (+$348.80 +$0.00 +$237.05)
Absolute Return (Stock Assigned at $37.00): +5.4%
= +$585.85/$10,862.95
Annualized Return: +75.7%
= (+$585.85/$10,862.95)*(365/26 days)
2. Research in Motion(RIMM) -- Closed
The transactions history was as follows:
09/23/2010 Bought 300 RIMM @ $46.55
09/23/2010 Sold 3 RIMM Oct2010 $47.50 Calls @ $1.64
10/13/2010 Buy-to-Close (BTC) 3 RIMM Oct2010 $47.50 Call Options @ $2.60
10/13/2010 Sell-to-Open (STO) 3 RIMM Nov2010 $50.00 Call Options @ $2.44
11/16/2010 Buy-to-Close (BTC) 3 RIMM Nov2010 $50.00 Call Options @ $6.15
11/16/2010 Sell-to-Open (STO) 3 RIMM Dec2010 $57.50 Call Options @ $3.05
12/06/2010 Buy-to-Close (BTC) 3 RIMM Dec2010 $57.50 Call Options @ $6.60
12/06/2010 Sell-to-Open (STO) 3 RIMM Dec2010 $62.50 Call Options @ $3.20
12/18/2010 Dec2010 Options Expired
Note: The price of RIMM was $60.20 upon Dec2010 options expiration.
12/21/2010 Sold 3 RIMM Jan2011 $57.50 Calls @ $2.60
Note: The price of RIMM was $58.44 when these options were sold.
01/14/2011 Buy-to-Close (BTC) 3 RIMM Jan2011 $57.50 Call Options @ $7.62
01/14/2011 Sell-to-Open (STO) 3 RIMM Feb2011 $62.50 Call Options @ $4.14
The price of RIMM was $65.04 today when this debit-spread transaction was made.
02/19/2011 Feb2011 RIMM Options Expired.
Note: the price of RIMM was $69.86 upon options expiration.
The overall performance result(including commissions) for these Research In Motion Ltd.(RIMM) transactions was as follows:
Stock Purchase Cost: $13,973.95
= ($46.55*300+$8.95 commission)
Net Profit:
(a) Options Income: -$1,859.60
= 300*($1.64-$2.60+$2.44-$6.15+$3.05-$6.60+$3.20+$2.60-$7.62+$4.14) - 8*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $62.50): +$4,776.05
= ($62.50-$46.55)*300 - $8.95 commissions
Total Net Profit(Stock assigned at $62.50): +$2,916.45
= (-$1,859.60 +$0.00 +$4,776.05)
Absolute Return (Stock Assigned at $62.50): +20.9%
= +$2,916.45/$13,973.95
Annualized Return: +51.1%
= (+$2,916.45/$13,973.95)*(365/149 days)
