The details of the associated transactions and a potential return-on-investment result are as follows:
1. Noble Corp. (NE)
The transactions were as follows:
04/30/2013 Bought 700 NE shares @ $30.464
04/30/2013 Sold 7 NE May2014 $30.00 Call Options @ $.74
Note: the price of NE was $30.464 today when these options were sold.
05/01/2014 Ex-dividend of $.375 per share
A possible overall performance result (including commissions) for these Noble Corp covered calls is as follows:
Stock Purchase Cost: $21,333.75
= ($30.464*700+$8.95 commission)
Net Profit:
(a) Options Income: +$503.80
= 700*$.74 - $14.20 commissions
(b) Dividend Income: +$262.50 = $.375 per share * 700 shares
(c) Capital Appreciation (If NE assigned at $30.00) = -$333.75
= ($30.00-$30.464)*700 - $8.95 commissions
Total Net Profit (If NE assigned at $30.00): +$432.55
= (+$503.80 +$262.50 -$333.75)
Absolute Return if Assigned (at $30.00): +2.0%
= +$432.55/$21,333.75
Annualized Return If Assigned (ARIA): +41.1%
= (+$432.55/$21,333.75)*(365/18 days)
