There are currently eleven holdings in the Covered Calls Advisor Portfolio. Covered calls with Jan2012 expirations were established previously for four of these holdings. Today, covered calls have been re-established on six holdings (Halliburton Co., iShares MSCI Emerging Markets ETF, iShares MSCI South Korea ETF, iShares MSCI Taiwan ETF, Peabody Energy Corp., and Valero Energy Corp.).
The sole remaining holding that remains unhedged is Apple Inc. The Covered Calls Advisor is expecting Apple to report quarterly earnings numbers on January 24th that are well above analysts' consensus estimates. Therefore call options will not be sold against Apple stock until after this announcement.
The detailed transactions history for the six covered calls positions established today as well as possible performance results are as follows:
1. Halliburton Co.(HAL) -- 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.
12/17/2011 Dec2011 Options Expired.
Note: the price of Halliburton was $31.76 upon options expiration.
01/03/2012 Sold 3 Jan2012 $35.00 call options @ $1.06
Note: the price of Halliburton was $34.48 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: +$1,217.40
= ($2.06 + $1.05 + $1.06)*300 shares - 3*$11.20 commissions
(b) Dividend Income: +$27.00 ($.09*300 shares)
(c) Capital Appreciation (If stock price unchanged at $34.48): -$464.95
= ($34.48 - $36.00)*300 - $8.95 commissions
(c) Capital Appreciation (If HAL stock above $35.00 at Jan2012 expiration): -$308.95= ($35.00-$36.00)*300 -$8.95 commissions
Total Net Profit(If stock price unchanged at $34.48): +$779.45
= (+$1,217.40 +$27.00 -$464.95)
Total Net Profit(If stock above $35.00 at Jan2012 options expiration):+$935.45
= (+$1,217.40 +$27.00 -$308.95)
1. Absolute Return if Unchanged at $34.48: +7.2%
= +$779.45/$10,800.00
Annualized Return If Unchanged (ARIU): +30.3%
= (+$779.45/$10,800.00)*(365/87 days)
2. Absolute Return (If stock above $35.00 at Jan2012 options expiration): +8.7%
= +$935.45/$10,800.00
Annualized Return (If stock price above $36.00 at expiration): +36.3%
= (+$935.45/$10,800.00)*(365/87 days)
2. iShares MSCI Emerging Markets ETF (EEM) -- Continuation
The transaction 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.
12/17/2011 Dec2011 Options Expired.
Note: the price of EEM was $37.16 upon options expiration.
12/20/2011 Ex-Distribution $173.45 = $.3469 * 500 shares
01/03/2012 Sold 5 Jan2012 $39.00 call options @ $.98
Note: the price of EEM was $39.05 when these options were sold.
A possible overall performance result(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: +$3,125.70
= [500*($.83 +$.35+$.62+$.99+$.71+$.63+$.78+$.59+$.98) - 9*$12.70 commissions]
(b) Distribution Income: $403.91 = ($.46092+$.3469) * 500 shares
(c) Capital Appreciation (If EEM assigned at $39.00 at expiration): -$4,413.95
= ($39.00-$47.81)*500 - $8.95 commissions
Total Net Profit (If EEM assigned at $39.00): -$884.34
= (+$3,125.70 +$403.91 -$4,413.95)
Absolute Return (If EEM assigned at $39.00 at expiration): -3.7%
= -$884.34/$23,913.95
Annualized Return If Assigned (ARIA): -4.9%
= (-$884.34/$23,913.95)*(365/278 days)
3. 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.
12/17/2011 Dec2011 Options Expired.
Note: the price of EWY was $51.38 upon options expiration.
12/20/2011 Ex-Distribution $298.40 = $.373 * 800 shares
01/03/2012 Sold 8 EWY Jan2012 $55.00 call options @ $1.07
Note: the price of EWY was $54.20 when these 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: +$4,067.15
= (800*($2.59+$1.48+$1.07) - 3*$14.95 commissions)
(b) Distribution Income: +$298.40
(c) Capital Appreciation (If EWY price unchanged at $54.20): -$344.95
= ($54.20-$54.62)*800 - $8.95 commissions
(c) Capital Appreciation (If EWY assigned at $55.00): +$295.05
= ($55.00-$54.62)*800 - $8.95 commissions
Total Net Profit (If EWY price unchanged at $54.20): +$4,020.60
= (+$4,067.15 +$298.40 -$344.95)
Total Net Profit(If EWY assigned at $55.00): +$5,200.60
= (+$4,067.15 +$298.40 +$295.05)
1. Absolute Return if Unchanged at $54.20: +9.2%
= +$4,020.60/$43,704.95
Annualized Return If Unchanged (ARIU): +38.2%
= (+$4,020.60/$43,704.95)*(365/88 days)
2. Absolute Return if Assigned at $55.00: +11.9%
= +$5,200.60/$43,704.95
Annualized Return If Assigned (ARIA): +49.4%
= (+$5,200.60/$43,704.95)*(365/88 days)
4. iShares MSCI Taiwan ETF (EWT) -- Continuation
The transactions history is as follows:
07/18/2011 Bought 1,000 EWT @ $14.65
07/19/2011 Sold 10 EWT Aug2011 $15.00 Calls @ $.31
Note: The price of EWT was $14.85 today when the options were sold.
08/20/2011 Aug2011 Options Expired.
08/31/2011 Sold 10 EWT Sep2011 $14.00 Calls @$.29
Note: The price of EWT was $13.89 when these call options were sold.
09/17/2011 Sep2011 EWT options expired.
09/20/2011 Sold 10 EWT Oct2011 $13.00 Calls @ $.32
10/22/2011 Oct2011 options expired.
10/26/2011 Sold 10 EWT Nov2011 $13.00 Calls @ $.39
11/19/2011 Nov2011 EWT options expired.
11/30/2011 Sold 10 EWT Dec2011 $12.00 Calls @ $.29
12/17/2011 Dec2011 Options Expired.
Note: the price of EWT was $11.21 upon options expiration.
12/20/2011 Ex-Distribution $472.80 = $.4728 * 1,000 shares
01/03/2012 Sold 10 EWT Jan2012 $12.00 call options @ $.22
Note: the price of EWT was $11.87 when these options were sold.
Two possible overall performance results(including commissions) for the EWT transactions would be as follows:
Stock Purchase Cost: $14,650.95
= ($14.65*1,000+$8.95 commission)
Net Profit:
(a) Options Income: +$1,721.30
= (1,000*($.31+$.29+$.32+$.39+$.29+$.22) - 6*$16.45 commissions)
(b) Dividend Income: +$472.80 = $.4728 * 1,000 shares
(c) Capital Appreciation (If unchanged at $11.87): -$2,788.95
= ($11.87-$14.65)*1,000 - $8.95 commissions
(c) Capital Appreciation (If assigned at $12.00): -$2,658.95
= ($12.00-$14.65)*1,000 - $8.95 commissions
Total Net Profit(If EWT price unchanged at $11.87): -$594.85
= (+$1,721.30 +$472.80 -$2,788.95)
Total Net Profit(If EWT price assigned at $12.00): -$464.85
= (+$1,721.30 +$472.80 -$2,658.95)
Absolute Return if Unchanged at $11.87: -4.1%
= -$594.85/$14,650.95
Annualized Return If Unchanged (ARIU) -7.9%
= (-$594.85/$14,650.95)*(365/187 days)
Absolute Return if Assigned at $12.00: -3.2%
= -$464.85/$14,650.95
Annualized Return If Assigned (ARIA) -6.2%
= (-$464.85/$14,650.95)*(365/187 days)
5. Peabody Energy Corp.(BTU) -- 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.
12/17/2011 Dec2011 Options Expired.
Note: the price of BTU was $32.98 upon options expiration.
01/03/2012 Sold 3 BTU Jan2012 $35.00 call options @ $1.59
Note: the price of BTU was $35.34 when these 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: +$1,818.20
= (300*($1.67+$1.85+$1.10+$1.59) - 4*$11.20 commissions)
(b) Dividend Income: $0.00
(c) Capital Appreciation (If stock assigned at $35.00): -$2,771.35
= ($35.00-$44.208)*300 - $8.95 commissions
Total Net Profit (If stock assigned at $35.00): -$953.15
= (+$1,818.20 +$0.00 -$2,771.35)
Absolute Return (If stock assigned at $35.00 at expiration): -7.2%
= -$953.15/$13,271.35
Annualized Return (If stock assigned at $39.00): -21.1%
= (-$953.15/$13,271.35)*(365/124 days)
6. Valero Energy Corp.(VLO) -- 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.
12/17/2011 Dec2011 Options Expired.
Note: the price of VLO was $20.52 upon options expiration.
01/03/2012 Sold 4 VLO Feb2012 $22.00 call options @ $.84
Note: the price of VLO was $21.04 when these 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: +$1,244.15
= ($1.75+$.61+$.84)*400 shares - 3*$11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $21.04 at expiration): -$392.95
= ($21.04-$22.00)*400 - $8.95 commissions
(c) Capital Appreciation (If VLO stock above $23.00 at Dec2011 expiration): -$8.95
= ($22.00-$22.00)*400 -$8.95 commissions
Total Net Profit(If stock price unchanged at $21.04): +$851.20
= (+$1,244.15 +$0.00 -$392.95)
Total Net Profit(If stock price above $22.00 at Feb2012 options expiration):
+$1,235.20 = (+$1,244.15 +$0.00 -$8.95)
1. Absolute Return if Unchanged at $21.04: +9.7%
= +$851.20/$8,800.00
Annualized Return If Unchanged (ARIU): +30.4%
= (+$851.20/$8,800.00)*(365/116 days)
2. Absolute Return (If stock price above $22.00 at Feb2012 options expiration):
+14.0% = +$1,235.20/$8,800.00
Annualized Return (If stock price above $22.00 at expiration): +44.2%
= (+$1,235.20/$8,800.00)*(365/116 days)
