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)
