The Covered Calls Advisor Portfolio (CCAP) contained a total of fourteen covered calls positions with September 2011 expirations, with the following results:
- Ten covered calls positions in the CCAP (Alcoa Inc., General Motors Co., iShares MSCI China ETF, iShares MSCI Emerging Markets ETF, iShares MSCI Germany ETF, iShares MSCI South Korea ETF, iShares MSCI Taiwan ETF, Morgan Stanley, ProShares UltraShort 20+ Year Treasury ETF, and Valero Energy Corp.) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish October 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.
- Four covered calls positions (Apple Inc., Best Buy Corp., International Paper Co., 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. Apple Inc. (AAPL) -- Closed
The transactions history is as follows:
08/22/2011 Bought 100 AAPL @ $359.986
08/22/2011 Sold 1 AAPL Sep2011 $375.00 Call @ $8.45
Note: The call option was sold today when the AAPL stock was trading at $361.52.
09/17/2011 AAPL options closed in-the-money and stock assigned at $375.00 strike price.
Note: The closing price of AAPL at expiration was $400.50.
The result(including commissions) for the Apple Inc. (AAPL) transactions was as follows:
Stock Purchase Cost: $36,007.55
= ($359.986*100+$8.95 commission)
Net Profit:
(a) Options Income: +$835.30
= (100*$8.45 - $9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $375.00): +$1,492.45
= ($375.00-$359.986)*100 - $8.95 commissions
Total Net Profit(If stock assigned at $375.00): +$2,327.75
= (+$835.30 +$0.00 +$1,492.45)
Absolute Return (Stock Assigned at $375.00): +6.5%
= +$2,327.75/$36,007.55
Annualized Return: +90.8%
= (+$2,327.75/$36,007.55)*(365/26 days)
2. Best Buy Corp. (BBY) -- Closed
The transactions history is as follows:
01/24/2011 Bought 300 BBY @ $35.13
01/24/2011 Sell-to-Open(STO) 3 BBY Feb2011 $36.00 Calls @ $.57
02/19/2011 Feb 2011 Options Expired
03/21/2011 Sell-to-Open(STO) 3 BBY Apr2011 $34.00 Calls @ $.49
Note: the price of BBY was $31.92 today when the options were sold.
04/16/2011 Apr2011 BBY options expired.
04/26/2011 Sold 3 BBY May2011 $31.00 Calls @ $.60
Note: The price of BBY was $30.59 when these call options were sold.
05/20/2011 Bought-to-Close(BTC) 3 BBY May3011 $31.00 Calls @ $.36
Note: The price of BBY was $31.31 when the options were bought back.
05/20/2011 Sell-to-Open(STO) 3 BBY Jun2011 $32.00 Calls @ $.94
Note: The price of BBY was $31.43 when these options were sold.
06/18/2011 Jun2011 Options Expired
Note: the price of BBY was $31.01 upon options expiration.
06/28/2011 Sold 3 BBY Aug2011 $33.00 Calls @ $.83
Note: price of BBY stock was $31.90 when these options were sold.
08/20/2011 Aug2011 BBY options expired.
08/24/2011 Sold 3 BBY Sep2011 $25.00 Calls @$1.32
Note: The price of BBY was $24.73 when these call options were sold.
09/17/2011 BBY options closed in-the-money and stock assigned at $25.00 strike price.
Note: The closing price of BBY at expiration was $25.43.
The overall performance result(including commissions) for the Best Buy Corp.(BBY) transactions was as follows:
Stock Purchase Cost: $10,547.95
= ($35.13*300+$8.95 commission)
Net Profit:
(a) Options Income: +$1,238.60
= (300*($.57+$.49+$.60-$.36+$.94+$.83+$1.32) - 7*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If assigned at $25.00): -$3,047.95
= ($25.00-$35.13)*300 - $8.95 commissions
Total Net Profit(Stock assigned at $25.00): -$1,809.35
= (+$1,238.60 +$0.00 -$3,047.95)
Absolute Return (Stock Assigned at $25.00): -17.2%
= -$1,809.35/$10,547.95
Annualized Return: -26.5%
= (-$1,809.35/$10,547.95)*(365/236 days)
3. International Paper Co.(IP) -- Continuation
The transactions history is as follows:
05/17/2011 Bought 500 IP @ $31.26
05/17/2011 Sold 5 IP Jun2011 $32.00 Calls @ $.82
06/18/2011 Jun2011 Options Expired
Note: the price of IP was $26.57 upon options expiration.
06/21/2011 Sold 5 IP Jul2011 $30.00 Calls @ $.38
Note: price of IP stock was $28.56 when these options were sold.
07/16/2011 Jul2011 IP options expired.
07/18/2011 Sold 5 IP Aug2011 $30.00 Calls @$.90
Note: The price of IP was $29.79 when these call options were sold.
08/11/2011 Ex-Dividend of $.2625 per share
08/20/2011 Aug2011 IP options expired.
08/24/2011 Sold 5 IP Sep2011 $26.00 Calls @$.78
Note: The price of IP was $25.16 when these call options were sold.
09/17/2011 IP options closed in-the-money and stock assigned at $26.00 strike price.
Note: The closing price of IP at expiration was $27.98.
The overall performance results(including commissions) for the International Paper Co.(IP) transactions was as follows:
Stock Purchase Cost: $15,638.95
= ($31.26*500+$8.95 commission)
Net Profit:
(a) Options Income: +$1,389.20
= (500*($.82+$.38+$.90+$.78) - 4*$12.70 commissions)
(b) Dividend Income: $131.25 = $.2625 * 500 shares
(c) Capital Appreciation (If stock assigned at $26.00): -$2,638.95
= ($26.00-$31.26)*500 - $8.95 commissions
Total Net Profit (Stock assigned at $26.00): -$1,118.50
= (+$1,389.20 +$131.25 -$2,638.95)
Absolute Return (Stock assigned at $26.00 at expiration): -7.2%
= -$1,118.50/$15,638.95
Annualized Return: -21.2%
= (-$1,118.50/$15,638.95)*(365/123 days)
4. Valero Energy Corp. (VLO) -- Closed
The transactions history is as follows:
07/20/2011 Bought 300 VLO @ $25.72
07/20/2011 Sold 3 VLO Aug2011 $26.00 Calls @ $.97
Note: the price of VLO was $25.81 when the call options were sold.
08/15/2011 Ex-dividend payment of $.05 per share.
08/24/2011 Sold 3 VLO Sep2011 $22.00 Calls @ $.56
09/17/2011 VLO options closed in-the-money and stock assigned at $22.00 strike price.
Note: The closing price of VLO at expiration was $22.19.
The overall performance results(including commissions) for the Valero Energy Corp.(VLO) transactions was as follows:
Stock Purchase Cost: $7,724.95
= ($25.72*300+$8.95 commission)
Net Profit:
(a) Options Income: +$436.60
= ($.97+$.56)*300 shares) - 2*$11.20 commissions
(b) Dividend Income: +$15.00 = $.05*300 shares (Ex-dividend date 8/15/2011)
(c) Capital Appreciation (VLO above $22.00 at Sep2011 expiration): -$1,124.95
= +($22.00-$25.72)*300 - $8.95 commissions
Total Net Profit(If stock price above $22.00 at Sep2011 options expiration): -$673.35
= (+$436.60 +$15.00 -$1,124.95)
Absolute Return (Stock price above $22.00 at Sep2011 options expiration): -8.7%
= -$673.35/$7,724.95
Annualized Return (If stock price above $26.00 at expiration): -53.9%
= (-$673.35/$7,724.95)*(365/59 days)
