Yesterday, the Covered Calls Advisor established four 100% Cash-Secured Puts positions in Fusion-io Inc. (Ticker Symbol FIO), Hertz Global Holdings Inc. (HTZ), JC Penney Co. Inc. (JCP), and Transocean Inc. (RIG). Fusion-io and Transocean were sold with June 2013 option expirations and JC Penney and Hertz were sold with the July 2013 options expiration month.
The Covered Calls Advisor does not use margin, so the detailed information on these positions and some potential results shown below reflect the fact that these positions were established using 100% cash securitization for the Put options sold.
As shown below, the absolute return-on-investment (ROI) percent and the comparable annualized ROI (if stock price is unchanged at options expiration date) are as follows:
- Fusion-io = +3.7% Absolute; +70.3% Annualized
- Hertz = +3.3% Absolute; +25.2% Annualized
- JC Penney = +6.1%; +47.6% Annualized
- Transocean = +1.4%; +27.6% Annualized
The transactions made and some possible results are detailed below.
1. Fusion-io Inc.
The transaction was as follows:
06/04/2013 Sold 3 Fusion-io Inc. (FIO) Jun2013 $14.00 Put Options @ $.55
Note: the price of FIO was $14.29 when these Puts were sold.
A possible overall performance results(including commissions) for this FIO transaction would be as follows:
100% Cash-Secured Cost Basis: $4,200.00
= $14.00*300
Net Profit:
(a) Options Income: +$153.80
= ($.55*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If FIO remains above $14.00 at Jun2013 expiration): +$0.00
= ($14.00-$14.00)*300 shares
Total Net Profit (If FIO is above $14.00 strike price at Jun2013 options expiration): +$153.80 = (+$153.80 +$0.00 +$0.00)
Absolute Return (If FIO above $14.00 at Jun2013 options expiration and Put options thus expire worthless): +3.7%
= +$153.80/$4,200.00
Annualized Return (If stock price above $14.00 at expiration): +70.3%
= (+$153.80/$4,200.00)*(365/19 days)
The transaction was as follows:
06/04/2013 Sold 3 Fusion-io Inc. (FIO) Jun2013 $14.00 Put Options @ $.55
Note: the price of FIO was $14.29 when these Puts were sold.
A possible overall performance results(including commissions) for this FIO transaction would be as follows:
100% Cash-Secured Cost Basis: $4,200.00
= $14.00*300
Net Profit:
(a) Options Income: +$153.80
= ($.55*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If FIO remains above $14.00 at Jun2013 expiration): +$0.00
= ($14.00-$14.00)*300 shares
Total Net Profit (If FIO is above $14.00 strike price at Jun2013 options expiration): +$153.80 = (+$153.80 +$0.00 +$0.00)
Absolute Return (If FIO above $14.00 at Jun2013 options expiration and Put options thus expire worthless): +3.7%
= +$153.80/$4,200.00
Annualized Return (If stock price above $14.00 at expiration): +70.3%
= (+$153.80/$4,200.00)*(365/19 days)
2. Hertz Global Holdings Inc.
The transaction was as follows:
06/04/2013 Sold 3 Hertz (HTZ) Jul2013 $25.00 Put Options @ $.85
Note: the price of HTZ was $25.76 when these Puts were sold.
= $25.00*300
Net Profit:
(a) Options Income: +$243.80
= ($.85*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If HTZ remains above $25.00 at Jul2013 expiration): +$0.00
= ($25.00-$25.00)*300 shares
Total Net Profit (If HTZ is above $25.00 strike price at Jul2013 options expiration): +$243.80
= (+$243.80 +$0.00 +$0.00)
Absolute Return (If HTZ above $25.00 at Jul2013 options expiration and Put options thus expire worthless): +3.3%
= +$243.80/$7,500.00
Annualized Return (If stock price above $25.00 at expiration): +25.2%
= (+$243.80/$7,500.00)*(365/47 days)
3. JC Penney Co. Inc.
The transaction was as follows:
06/04/2013 Sold 3 JC Penney Co. Inc. (JCP) Jul2013 $18.00.00 Put Options @ $1.34
Note: the price of JCP was $17.80 when these Puts were sold.
A possible overall performance results(including commissions) for this JCP transaction would be as follows:
100% Cash-Secured Cost Basis: $5,400.00
= $18.00*300
Net Profit:
(a) Options Income: +$390.80
= ($1.34*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If JCP price remains unchanged at $17.80 at Jul2013 expiration):
-$60.00 = ($17.80-$25.00)*300 shares; OR
(c) Capital Appreciation (If JCP is above $18.00 strike price at Jul2013 expiration): +$0.00
= ($18.00-$18.00)*300 shares
Total Net Profit (If JCP price remains unchanged at $17.80 at Jul2013 options expiration): +$330.80 = (+$390.80 +$0.00 -$60.00); OR
Total Net Profit (If JCP is above $18.00 strike price at Jul2013 options expiration): +$390.80
= (+$390.80 +$0.00 +$0.00)
1. Absolute Return (If JCP price remains unchanged at $17.80 at Jul2013 options expiration): +6.1%
= +$330.80/$5,400.00
Annualized Return (If stock price unchanged at $17.80 at expiration): +47.6%
= (+$330.80/$5,400.00)*(365/47 days)
2. Absolute Return (If JCP above $18.00 at Jul2013 options expiration and Put options thus expire worthless): +7.2%
= +$390.80/$5,400.00
Annualized Return (If stock price above $18.00 at expiration): +56.2%
= (+$390.80/$5,400.00)*(365/47 days)
4. Transocean Inc.
The transaction was as follows:
06/04/2013 Sold 2 Transocean Inc. (RIG) Jun2013 $50.00 Put Options @ $.77
Note: the price of RIG was $51.08 when these Puts were sold.
The transaction was as follows:
06/04/2013 Sold 3 Hertz (HTZ) Jul2013 $25.00 Put Options @ $.85
Note: the price of HTZ was $25.76 when these Puts were sold.
A possible overall performance results(including commissions) for this HTZ transaction would be as follows:
100% Cash-Secured Cost Basis: $7,500.00 = $25.00*300
Net Profit:
(a) Options Income: +$243.80
= ($.85*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If HTZ remains above $25.00 at Jul2013 expiration): +$0.00
= ($25.00-$25.00)*300 shares
Total Net Profit (If HTZ is above $25.00 strike price at Jul2013 options expiration): +$243.80
= (+$243.80 +$0.00 +$0.00)
Absolute Return (If HTZ above $25.00 at Jul2013 options expiration and Put options thus expire worthless): +3.3%
= +$243.80/$7,500.00
Annualized Return (If stock price above $25.00 at expiration): +25.2%
= (+$243.80/$7,500.00)*(365/47 days)
3. JC Penney Co. Inc.
The transaction was as follows:
06/04/2013 Sold 3 JC Penney Co. Inc. (JCP) Jul2013 $18.00.00 Put Options @ $1.34
Note: the price of JCP was $17.80 when these Puts were sold.
A possible overall performance results(including commissions) for this JCP transaction would be as follows:
100% Cash-Secured Cost Basis: $5,400.00
= $18.00*300
Net Profit:
(a) Options Income: +$390.80
= ($1.34*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If JCP price remains unchanged at $17.80 at Jul2013 expiration):
-$60.00 = ($17.80-$25.00)*300 shares; OR
(c) Capital Appreciation (If JCP is above $18.00 strike price at Jul2013 expiration): +$0.00
= ($18.00-$18.00)*300 shares
Total Net Profit (If JCP price remains unchanged at $17.80 at Jul2013 options expiration): +$330.80 = (+$390.80 +$0.00 -$60.00); OR
Total Net Profit (If JCP is above $18.00 strike price at Jul2013 options expiration): +$390.80
= (+$390.80 +$0.00 +$0.00)
1. Absolute Return (If JCP price remains unchanged at $17.80 at Jul2013 options expiration): +6.1%
= +$330.80/$5,400.00
Annualized Return (If stock price unchanged at $17.80 at expiration): +47.6%
= (+$330.80/$5,400.00)*(365/47 days)
2. Absolute Return (If JCP above $18.00 at Jul2013 options expiration and Put options thus expire worthless): +7.2%
= +$390.80/$5,400.00
Annualized Return (If stock price above $18.00 at expiration): +56.2%
= (+$390.80/$5,400.00)*(365/47 days)
4. Transocean Inc.
The transaction was as follows:
06/04/2013 Sold 2 Transocean Inc. (RIG) Jun2013 $50.00 Put Options @ $.77
Note: the price of RIG was $51.08 when these Puts were sold.
A possible overall performance results(including commissions) for this RIG transaction would be as follows:
100% Cash-Secured Cost Basis: $10,000.00
= $50.00*200
Net Profit:
(a) Options Income: +$143.55
= ($.77*200 shares) - $10.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If RIG remains above $50.00 at Jun2013 expiration): +$0.00
= ($50.00-$50.00)*200 shares
Total Net Profit (If RIG is above $50.00 strike price at Jun2013 options expiration): +$143.55
= (+$143.55 +$0.00 +$0.00)
Absolute Return (If RIG above $50.00 at Jun2013 options expiration and Put options thus expire worthless): +1.4%
= +$143.55/$10,000.00
Annualized Return (If stock price above $50.00 at expiration): +27.6%
= (+$143.55/$10,000.00)*(365/19 days)
