Established 100% Cash-Secured Puts -- Prudential Financial Inc.

Today, the Covered Calls Advisor established a new 100% Cash-Secured Puts position in Prudential Financial Inc.  (Ticker Symbol PRU) with a Jun2013 expiration.

The transaction was as follows:

05/31/2013 Sold 3 Prudential Financial Inc. (PRU) Jun2013 $67.50 Put Options @ $1.12

Note: the price of PRU was $69.02 today when these Puts were sold.

The Covered Calls Advisor does not use margin, so the detailed information on this position and some potential results shown below reflect the fact that this position was established using 100% cash securitization for the three Put options sold.

A possible overall performance results(including commissions) for this PRU transaction would be as follows:
100% Cash-Secured Cost Basis: $20,250.00 = $67.50*300

Net Profit:
(a) Options Income: +$324.80
= ($1.12*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If PRU remains above $67.50 at Jun2013 expiration): +$0.00
= ($67.50-$67.50)*300 shares

Total Net Profit (If PRU is above $67.50 strike price at Jun2013 options expiration): +$324.80  = (+$324.80 +$0.00 +$0.00)

Absolute Return (If PRU above $67.50 at Jun2013 options expiration and Put options thus expire worthless): +1.6%
= +$324.80/$20,250.00
Annualized Return (If stock price above $67.50 at expiration): +26.6%
= (+$324.80/$20,250.00)*(365/22 days)

Establish Covered Calls -- Potash Corp. of Saskatchewan Inc. and Tesoro Corporation

Today, new covered calls positions were established in Potash Corp of Saskatchewan Inc. (ticker symbol POT) and Tesoro Corporation (ticker TSO) with Jun2013  options expiration dates.  The details are as follows:

1. Potash Corp. of Saskatchewan Inc. (POT) -- New Covered Calls Position

The transactions were as follows:
05/24/2013 Bought 300 POT shares @ $41.22
05/24/2013 Sold 3 POT Jun2013 $40.00 Call Options @ $1.69
Note: the price of POT was $41.25 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: $12,374.95
= ($41.22*300+$8.95 commission)

Net Profit:
(a) Options Income: +$495.80
= 300*$1.69 - $11.20 ommissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If POT assigned at $40.00) = -$374.95
= ($40.00-$41.22)*300 - $8.95 commissions

Total Net Profit (If POT assigned at $40.00): +$120.85
= (+$495.80 +$0.00 -$374.95)

Absolute Return if Assigned (at $40.00): +1.0%
= +$120.85/$12,374.95
Annualized Return If Assigned (ARIA): +11.9%
= (++$120.85/$12,374.95)*(365/30 days)


2. Tesoro Corporation (TSO) -- New Covered Calls Position

The transactions were as follows:
05/24/2013 Bought 200 TSO shares @ $61.11
05/24/2013 Sold 2 TSO Jun2013 $60.00 Call Options @ $3.15
Note: the price of TSO was $61.25 when the options were sold.

A possible overall performance result (including commissions) for these Tesoro Corp. (TSO) covered calls is as follows:

Stock Purchase Cost: $12,230.95
= ($61.11*200+$8.95 commission)

Net Profit:
(a) Options Income: +$619.55
= 200*$3.15 - $10.45 ommissions
(b) Dividend Income: +$40.00 = ($.20 * 200 shares). Ex-div date is May 29th
(c) Capital Appreciation (If TSO assigned at $60.00) = -$230.95
= ($60.00-$61.11)*200 - $8.95 commissions

Total Net Profit (If TSO assigned at $60.00): +$428.60
= (+$619.55 +$40.00 -$230.95)

Absolute Return if Assigned (at $60.00): +3.5%
= +$428.60/$12,230.95
Annualized Return If Assigned (ARIA): +42.6%
= (+$428.60/$12,230.95)*(365/30 days)

May 2013 Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained four covered calls positions with May 2013 expirations. A summary of the results is as follows:

- All four positions (iShares MSCI China ETF, MetLife Inc., Potash Corp of Saskatchewan Inc., and Teva Pharmaceutical Industries Ltd) had their options exercised this past expiration Friday since the stock prices closed above the May2013 options' strike prices.  The associated equities were assigned (i.e. equities called away) at their respective strike prices. 

The annualized return-on-investment financial results for these four closed positions are:
iShares MSCI China ETF = +19.6%
MetLife Inc. = +27.1%
Potash Corp of Saskatchewan Inc. = +34.0%
Teva Pharmaceuticals = -1.0%
The detailed transactions history and results for these closed positions are provided below.

1. iShares MSCI China ETF (FXI) -- Closed
The transactions history was 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.
04/19/2013 Apr2013 FXI options expired
04/26/2013 Sold 10 FXI May2013 $37.00 call options @ $.73
Note: the price of FXI was $36.92 when these options were sold.
05/18/2013 1,000 FXI May2013 call options assigned at $37.00 strike price.
Note: the price of FXI was $37.91 upon options expiration.

The overall performance result (including commissions) for these iShares MSCI China ETF covered calls was as follows:
Stock Purchase Cost: $37,208.95
= ($37.20*1,000+$8.95 commission)

Net Profit:
(a) Options Income: +$1,387.10
= 1,000*($.69+$.73) - 2*$16.45 ommissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (FXI assigned at $37.00) = -$208.95
= ($37.00-$37.20)*1,000 - $8.95 commissions

Total Net Profit (FXI assigned at $37.00): +$1,178.15
= (+$1,387.10 +$0.00 -$208.95)

Absolute Return (at $37.00): +3.2%
= +$1,178.15/$37,208.95
Annualized Return: +19.6%
= (+$1,178.15/$37,208.95)*(365/59 days)


2. MetLife Inc. (MET) -- Closed
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.
05/18/2013 300 MET May2013 call options assigned at $39.00 strike price.

Note: the price of MET was $43.28 upon options expiration.

The overall performance result (including commissions) for these MetLife Inc. (MET)  covered calls was 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 was May 4th
(c) Capital Appreciation (MET assigned at $39.00) = +$15.05
= ($39.00-$38.92)*300 - $8.95 commissions

Total Net Profit (MET assigned at $39.00): +$512.35
= (+$441.80 +$55.50 +$15.05)

Absolute Return: +4.4%
= +$512.35/$11,684.95
Annualized Return: +27.1%
= (+$512.35/$11,684.95)*(365/59 days)

3. Potash Corp. of Saskatchewan Inc. -- Closed
The transactions history for this Potash Corp (Ticker Symbol POT) covered calls position was 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.
04/09/2013 $84.00 = ($.28 * 300 shares) ex-dividend
04/19/2013 Apr2013 POT options expired
04/26/2013 Sold 3 POT May2013 $40.00 call options @ $1.21
Note: the price of POT was $40.74 when these options were sold.
05/18/2013 300 POT May2013 call options assigned at $40.00 strike price.
Note: the price of POT was $43.59 upon options expiration.

The overall performance result (including commissions) for these Potash Corp (POT) covered calls was as follows:

Stock Purchase Cost: $12,002.35
= ($39.978*300+$8.95 commission)

Net Profit:
(a) Options Income: +$577.60
= 300*($.79+$1.21) - 2*$11.20 ommissions
(b) Dividend Income: +$84.00 = ($.28 * 300 shares). Ex-div date was April 9th
(c) Capital Appreciation (POT assigned at $40.00) = -$2.35
= ($40.00-$39.978)*300 - $8.95 commissions

Total Net Profit (POT assigned at $40.00): +$659.25
= (+$577.60 +$84.00 -$2.35)

Absolute Return: +5.5%
= +$659.25/$12,002.35
Annualized Return: +34.0%
= (+$659.25/$12,002.35)*(365/59 days)    


4. Teva Pharmaceutical Industries LTD -- Closed
The transactions were as follows: 3/27/2013 Bought 300 TEVA shares @ $39.70
3/27/2013 Sold 3 TEVA Apr2013 $40.00 Call Options @ $.64
Note: The price of TEVA was $39.77 when the options were sold
04/19/2013 Apr2013 TEVA options expired
04/26/2013 Sold 3 TEVA May2013 $37.50 call options @ $1.30
Note: the price of TEVA was $38.55 when these options were sold.
05/07/2013 $93.00 = ($.31 * 300 shares) ex-dividend
05/18/2013 300 TEVA May2013 call options assigned at $37.50 strike price.
Note: the price of TEVA was $40.23 upon options expiration.

The overall performance result (including commissions) for this Teva Pharmaceutical Industries Ltd covered calls position was as follows: Stock Purchase Cost: $11,918.95
= ($39.70*300+$8.95 commission)

Net Profit:
(a) Options Income: +$559.60
= 300*($.64+$1.30) - 2*$11.20 commissions
(b) Dividend Income: +$93.00=($.31 * 300 shares) ex-dividend date was 5/7/2013
(c) Capital Appreciation (TEVA assigned at $37.50): -$668.95
= ($37.50-$39.70)*300 - $8.95 commissions

Total Net Profit (TEVA assigned at $37.50): -$16.35
= (+$559.60 +$93.00 -$668.95)

Absolute Return (at $37.50): -0.1%
= -$16.35/$11,918.95
Annualized Return: -1.0%
= (-$16.35/$11,918.95)*(365/52 days)

Roll-Up-and-Out -- Apple Inc. Covered Call Position

Today is 4 days until May2013 options expiration. With Apple Inc. stock at $451.75, the  May2013 $425.00 option was well in-the-money and the time value remaining in the option was only $.18 [$26.93 - ($451.75-$425.00)].  The Covered Calls Advisor wanted to retain a covered call position in Apple Inc., so a decision was made to roll-up-and-out to the AAPL Jun2013 $450.00 strike price.  Details of this Apple Inc. covered call position to date are shown 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
05/14/2013 Bought-to-Close 1 AAPL May2013 $425.00 call option @ $26.93
Note: the AAPL price was $451.75 when this option close-out transaction was made
05/14/2013 Sold 1 AAPL Jun2013 $450.00 call option @ $16.05
Note: the AAPL price was $452.50 when this option was sold.

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: +$844.20
= 100*($9.70+$10.01-$26.93+$16.05) - 4*$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 $450.00) = +$2,814.05
= ($450.00-$421.77)*100 - $8.95 commissions

Total Net Profit (If AAPL assigned at $450.00): +$3,963.25
= (+$844.20 +$305.00 +$2,814.05)

Absolute Return if Assigned (at $450.00): +9.4%
= +$3,963.25/$42,185.95
Annualized Return If Assigned (ARIA): +31.5%
= (+$3,963.25/$42,185.95)*(365/109 days)