Today, a May 2013 call option was sold in Apple Inc. to re-establish the covered call position. As shown below, the April 2013 covered call option expired and the new position today was established at the May2013 $425.00 strike price. The transactions to date and a potential return on investment result is detailed below.
Apple Inc. Covered Call -- Continuation
The transactions history to date is as follows:
3/5/2013 Bought 100 AAPL shares @ $421.77
3/5/2013 Sold 1 Apr2013 $430 call option @ $9.70
04/19/2013 Apr2013 AAPL options expired
04/29/2013 Sold 1 AAPL May2013 $425.00 call option @ $10.01
Note: the AAPL price was $426.80 when the option was sold.
05/09/2013 $305.00=($3.05*100 shares) ex-dividend date
A possible overall performance result (including commissions) for this Apple Inc. (symbol AAPL) covered call is as follows:
Stock Purchase Cost: $42,185.95
= ($421.77*100+$8.95 commission)
Net Profit:
(a) Options Income: +$1,951.60
= 100*($9.70+$10.01) - 2*$9.70 commissions
(b) Dividend Income: +$305.00 ($3.05*100 shares) on May 9th ex-div date
(c) Capital Appreciation (If AAPL assigned at $425.00) = +$314.05
= ($425.00-$421.77)*100 - $8.95 commissions
Total Net Profit (If AAPL assigned at $425.00): +$2,570.65
= (+$1,951.60 +$305.00 +$314.05)
Absolute Return if Assigned (at $425.00): +6.1%
= +$2,570.65/$42,185.95
Annualized Return If Assigned (ARIA): +30.1%
= (+$2,570.65/$42,185.95)*(365/74 days)
