The Covered Calls Advisor Portfolio (CCAP) contained four positions with December 2013 expirations. A summary of the results is as follows:
- Two of the four positions (Citigroup Inc. and ProShares UltraShort 20+ Year Treasury ETF) were closed out at expiration. This was the optimal result for these two positions in that the maximum potential return-on-investment (ROI) results from when the positions were established were actually achieved. The annualized ROIs for these closed positions are:
Citigroup Inc. = +2.4% absolute return (equivalent to +17.2% annualized return for the 50 day holding period)
ProShares UltraShort 20+ Year Treasury ETF = +2.0% absolute return (equivalent to +21.6% annualized return for the 34 day holding period)
The detailed transactions history and results for these two closed positions is detailed below. The cash available from the closing of these positions will be retained in the Covered Calls Advisor Portfolio until new covered calls and/or 100% cash-secured puts positions are established (most likely in the next week or two). These transactions will be posted on this blog the same day they occur.
- Two of the four positions ended at expiration with long stock positions (Agnico Eagle Mines LTD and Noble Corp). The three Noble Corp. 100% cash-secured Puts were assigned at their $37.00 strike price since NE closed at Dec2013 options expiration at $36.32, below the $37.00 strike price. The covered calls position in Agnico Eagle Mines its options expire since the stock price closed on Dec2013 expiration Friday at $25.19, well below the Dec2013 options' $27.50 strike price. So, the Covered Calls Advisor Portfolio (CCAP) now owns 600 long shares in Agnico Eagle and 300 long shares in Noble Corp A decision will be made either sell these shares or to continue with covered calls positions by selling Jan2014 call options against the current long stock holdings. When these decisions are made and the accompanying transactions are completed, a post will be made on this blog on the same day with the transaction details.
Details of the transactions and associated return-on-investment results for the two closed positions are as follows:
1. Citigroup Inc. (Symbol C) -- Closed
The transactions were as follows:
11/01/2013 Bought 400 Citigroup Inc. Shares at $48.72
11/04/2013 Sold 4 Citi Dec2013 $48.00 Call Options at $1.92
Note: the price of Citi was $48.92 when these call options were sold
The overall performance result (including commissions) for these Citigroup covered calls was as follows:
Stock Purchase Cost: $19,496.95
= ($48.72*400+$8.95 commission)
Net Profit:
(a) Options Income: +$756.05
= 400*$1.92 - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation = -$296.95
= ($48.00-$48.72)*400 - $8.95 commissions
Total Net Profit: +$459.10
= (+$756.05 +$0.00 -$296.95)
Absolute Return: +2.4%
= +$459.10/$19,496.95
Annualized Return: +17.2%
= (+$459.10/$19,496.95)*(365/50 days)
2. ProShares UltraShort 20+ Year Treasury ETF (TBT) -- Closed
The transaction was as follows:
11/18/2013 Sold 3 Dec2013 $75.00 Puts @ $1.51
Note: The price of TBT was $75.65 when this transaction was executed.
The overall performance result (including commissions) for this ProShares UltraShort 20+ Year Treasury ETF transaction was as follows:
100% Cash-Secured Cost Basis: $22,500.00 = $75.00*300
Note: the price of TBT was $75.00 when these Put options were sold.
Net Profit:
(a) Options Income: +$453.00
= ($1.51*300 shares) - $14.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (TBT closed above $75.00 at Dec2013 expiration): +$0.00
= ($75.00-$75.00)*300 shares
Total Net Profit:+$453.00
= (+$453.00 +$0.00 +$0.00)
Absolute Return: +2.0%
= +$453.00/$22,500.00
Annualized Return: +21.6%
= (+$453.00/$22,500.00)*(365/34 days)
