Today, new covered calls positions were established in iShares MSCI China ETF (ticker FXI), MetLife (ticker MET), and Potash Corp.(ticker POT). The options expiration dates are April for FXI and POT and May for MET. The details are as follows:
1. iShares MSCI China ETF (FXI) -- New Covered Call Position
The transactions were as follows:
3/20/2013 Bought 1,000 FXI shares @ $37.20
3/20/2013 Sold 10 FXI Apr2013 $37.50 Call Options @ $.69
Note: the price of FXI was $37.20 when the options were sold.
A possible overall performance result (including commissions) for these iShares MSCI China ETF covered calls is as follows:
Stock Purchase Cost: $37,208.95
= ($37.20*1,000+$8.95 commission)
Net Profit:
(a) Options Income: +$673.55
= 1,000*$.69 - $16.45 ommissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If FXI assigned at $37.50) = +$291.05
= ($37.50-$37.20)*1,000 - $8.95 commissions
Total Net Profit (If FXI assigned at $37.50): +$964.60
= (+$673.55 +$0.00 +$291.05)
Absolute Return if Assigned (at $37.50): +2.6%
= +$964.60/$37,208.95
Annualized Return If Assigned (ARIA): +30.5%
= (+$1,595.35/$45,394.95)*(365/31 days)
2. MetLife Inc. (MET) -- New Covered Call Position
The transactions were as follows:
03/20/2013 Bought 300 MET shares @ $38.92
3/20/2013 Sold 3 MET May2013 $39.00 Call Options @ $1.51
Note: the price of MET was $38.92 when the options were sold.
A possible overall performance result (including commissions) for these MetLife Inc. (MET) covered calls is as follows:
Stock Purchase Cost: $11,684.95
= ($38.92*300+$8.95 commission)
Net Profit:
(a) Options Income: +$441.80
= 300*$1.51 - $11.20 commissions
(b) Dividend Income: +$55.50 = ($.185 * 300 shares). Ex-div date is May 4th
(c) Capital Appreciation (If MET assigned at $39.00) = +$15.05
= ($39.00-$38.92)*300 - $8.95 commissions
Total Net Profit (If MET assigned at $39.00): +$512.35
= (+$441.80 +$55.50 +$15.05)
Absolute Return if Assigned (at $39.00): +4.4%
= +$512.35/$11,684.95
Annualized Return If Assigned (ARIA): +27.1%
= (+$512.35/$11,684.95)*(365/59 days)
3. Potash Corp. of Saskatchewan Inc. (POT) -- New Covered Call Position
The transactions were as follows:
03/20/2013 Bought 300 POT shares @ $39.978
3/20/2013 Sold 3 POT Apr2013 $40.00 Call Options @ $.79
Note: the price of POT was $39.978 when the options were sold.
A possible overall performance result (including commissions) for these Potash Corp. of Saskatchewan Inc. (POT) covered calls is as follows:
Stock Purchase Cost: $12,002.35
= ($39.978*300+$8.95 commission)
Net Profit:
(a) Options Income: +$225.80
= 300*$.79 - $11.20 ommissions
(b) Dividend Income: +$84.00 = ($.28 * 300 shares). Ex-div date is April 9th
(c) Capital Appreciation (If POT assigned at $40.00) = -$2.35
= ($40.00-$39.978)*300 - $8.95 commissions
Total Net Profit (If POT assigned at $40.00): $307.45
= (+$225.80 +$84.00 -$2.35)
Absolute Return if Assigned (at $40.00): +2.6% = +$307.45/$12,002.35
Annualized Return If Assigned (ARIA): +30.2%
= (+$307.45/$12,002.35)*(365/31 days)
