Last Friday with Oct2014 Options expiration, options expired in Agnico Eagle Mines Ltd.(Symbol AEM), American Airlines Group (AAL), Bidu Inc. (BIDU), and Micron Technology Inc. (MU). Today, November 2014 call options were sold to continue positions in each of these four stocks by establishing covered calls.
The transactions to date for each of these positions and some possible resulting return-on-investment results are as follows:
1. Agnico Eagle Mines Ltd. (AEM) -- Continuation
The transactions are as follows:
09/24/2014 Sold 3 Oct2014 $30.00 Puts @ $1.10
Note: The price of Agnico Eagle was $30.03 when this transaction was
executed.
10/17/2014 3 Oct2014 $30.00 Puts expired
Note: the price of AEM was $28.72 when these Puts expired
10/20/2014 Sold 3 Nov2014 $30.00 Calls @ $1.75
Note: the price of AEM was $29.55 when these options were sold.
Two possible overall performance results (including commissions) for this Agnico
Eagle Mines transaction would be as follows:
100% Cash-Secured Cost Basis:
$9,000.00 = $30.00*300
Note: the price of AEM was $30.03 when these Put
options were sold.
Net Profit:
(a) Options Income: +$832.60
=
($1.10+$1.75)*300 shares - 2*$11.20 commissions
(b) Dividend Income: +$0.00
(c)
Capital Appreciation (If AEM close at current market price of $29.55 at Nov2014 expiration): -$135.00
= ($29.55-$30.00)*300 shares; OR
(c) Capital Appreciation (If AEM close above $30.00 at Nov2014 expiration): +$0.00
= ($30.00-$30.00)*300 shares
1. Total Net Profit (If AEM closes at current market price of $29.55 at Nov2014 options expiration):+$697.60
= (+$832.60 +$0.00
-$135.00); OR
2. Total Net Profit (If AEM is above $30.00 strike price at Nov2014 options expiration):+$832.60
= (+$832.60 +$0.00 +$0.00)
1. Absolute Return (If AEM is at $29.55 current market price at Nov2014 options
expiration and Put options thus expire worthless): +7.8%
=
+$697.60/$9,000.00
Annualized Return (If AEM is unchanged at $29.55 at Nov2014 expiration):
+47.2%
= (+$697.60/$9,000.00)*(365/60 days); OR
2. Absolute Return (If AEM is above $30.00 at Nov2014 options expiration and Put options thus expire worthless): +9.3%
= +$832.60/$9,000.00
Annualized Return (If AEM is above $30.00 at Nov2014 expiration): +56.3%
= (+$832.60/$9,000.00)*(365/60 days)
2. American Airlines Group (AAL) -- Continuation
The transactions are as follows:
09/23/2014 Sold 4 Oct2014 $35.00 Puts @ $1.44
Note: The price of American Airlines was $35.03 when this transaction was
executed.
10/17/2014 3 Oct2014 $35.00 Puts expired
Note: the price of AAL was $33.38 when these Puts expired
10/20/2014 Sold 3 Nov2014 $35.00 Calls @ $2.15
Note: the price of AAL was $34.50 when these options were sold.
Two possible overall performance results (including commissions) for these AAL
transactions would be as follows:
100% Cash-Secured Cost Basis: $14,000.00
= $35.00*400
Note: the price of AAL was $35.03 when these Put options
were sold.
Net Profit:
(a) Options Income: +$1,412.10
= ($1.44+$2.15) *400
shares - 2*$11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital
Appreciation (If AAL closes unchanged at $34.50 at Nov2014 expiration):
-$200.00
=
($34.50-$35.00)*400 shares; OR
(c) Capital Appreciation (If AAL closes above $35.00 at Nov2014 expiration): +$0.00
= ($35.00-$35.00)*400 shares
1. Total Net Profit (If AAL is above $35.00
strike price at Nov2014 options expiration):+$1,212.10
= (+$1,412.10 +$0.00
-$200.00); OR
2. Total Net Profit (If AAL is above $35.00 strike price at Nov2014 options expiration):+$1,412.10
= (+$1,412.10 +$0.00 +$0.00)
1. Absolute Return (If AAL is unchanged at $34.50 at Nov2014 options
expiration and Put options thus expire worthless): +8.7%
=
+$1,212.10/$14,000.00
Annualized Return (If AAL is above $35.00 at
Nov2014 expiration): +51.8%
= (+$1,212.10/$14,000.00)*(365/61 days); OR
2. Absolute Return (If AAL is unchanged at $34.50 at Nov2014 options expiration and Put options thus expire worthless): +10.1%
= +$1,412.10/$14,000.00
Annualized Return (If AAL is above $35.00 at Nov2014 expiration): +60.4%
= (+$1,412.10/$14,000.00)*(365/61 days)
3. Bidu Inc. (BIDU) -- Continuation
The transactions are as follows:
09/29/2014 Sold 1 Oct2014 $215.00 Put @ $4.90
Note: The price of Bidu was
$218.99 when this transaction was executed.
10/17/2014 1 Oct2014 $215.00 Put expired
Note: the price of Bidu was $211.73 when this Put option expired
10/20/2014 Sold 1 Nov2014 $220.00 Call @ $8.90
Note: the price of BIDU was $216.50 when this Call option were sold.
Two possible overall performance results (including commissions) for these BIDU transactions would be as follows:
100% Cash-Secured Cost Basis: $21,500.00 = $215.00*100
Note: the price of BIDU was $218.99 when the Put option was sold.
Net Profit:
(a) Options Income: +$1,360.60
= ($4.90+$8.90) *100 shares - 2*$9.70 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If BIDU closes unchanged at $216.50 at Nov2014 expiration):
+$150.00
= ($216.50-$215.00)*100 shares; OR
(c) Capital Appreciation (If BIDU closes above $220.00 at Nov2014 expiration): +$500.00
= ($220.00-$215.00)*100 shares
1. Total Net Profit (If BIDU is at current price of $216.50 at Nov2014 options expiration):+$1,510.60
= (+$1,360.60 +$0.00 +$150.00); OR
2. Total Net Profit (If BIDU is above $220.00 strike price at Nov2014 options expiration):+$1,860.60
= (+$1,360.60 +$0.00 +$500.00)
1. Absolute Return (If BIDU is unchanged at $216.50 at Nov2014 options expiration): +7.0%
= +$1,510.60/$21,500.00
Annualized Return (If BIDU is above $220.00 at Nov2014 expiration): +46.6%
= (+$1,510.60/$21,500.00)*(365/55 days); OR
2. Absolute Return (If BIDU is unchanged at $216.50 at Nov2014 options expiration: +8.7%
= +$1,860.60/$21,500.00
Annualized Return (If BIDU is above $220.00 at Nov2014 expiration): +57.4%
= (+$1,860.60/$21,500.00)*(365/55 days)The transaction is as follows:
4. Micron Technology Inc. (MU) -- Continuation
The transaction is as follows:
10/07/2014 Sold 4 Micron Technology Inc.
Oct2014 $31.00 Puts @ $.47
Note: The price of Micron was $31.93 when this
transaction was executed.
10/17/2014 4 Oct2014 $31.00 Puts expired
Note: the price of MU was $28.77 when these Put options expired
10/20/2014 Sold 4 Nov2014 $31.00 Calls @ $.99
Note: the price of MU was $29.35 when these Call options were sold.
Two possible overall performance results (including commissions) for
these transactions would be as follows:
100% Cash-Secured Cost Basis:
$12,400.00
= $31.00*400
Note: the price of Micron was $31.93 when these
Put options were sold.
Net Profit:
(a) Options Income: +$560.10
=
($.47+$.99)*400 shares - 2*$11.95 commissions
(b) Dividend Income: +$0.00
(c)
Capital Appreciation (If MU is unchanged at $29.35 at Nov2014 expiration): -$660.00
= ($29.35-$31.00)*400 shares; OR
(c) Capital Appreciation (If MU is above $31.00 at Nov2014 expiration): +$0.00
= ($31.00-$31.00)*400 shares
1. Total Net Profit (If MU is unchanged at $29.35
at Nov2014 options expiration): -$99.90
= (+$560.10 +$0.00
-$660.00); OR
2. Total Net Profit (If MU is above $31.00 strike price at Oct2014 options expiration):+$560.10
= (+$560.10 +$0.00 +$0.00)
1. Absolute Return (If MU is unchanged at $29.35 at Nov2014 options expiration): -0.8%
=
-$99.90/$12,400.00
Annualized Return (If MU above $31.00 at Nov2014 expiration):
-6.3%
= (-$99.90/$12,400.00)*(365/47 days); OR
2. Absolute Return (If MU is above $29.35 at Nov2014 options expiration and Put options thus expire worthless): +4.5%
= +$560.10/$12,400.00
Annualized Return (If MU above $31.00 at Nov2014 expiration): +35.1%
= (+$560.10/$12,400.00)*(365/47 days)
