The Covered Calls Advisor Portfolio (CCAP) contained eleven positions with November 2014 expirations. The results are as follows:
- Eight of the eleven positions (American Airlines, Baidu Ind., Chevron, EMC Inc., iShares MSCI China ETF, Google Inc., and Micron Technology Inc.) were closed out at expiration. This was the optimal result for these positions in that the maximum potential return-on-investment (ROI) results was achieved from when each of these postions was established. The annualized ROI for these closed positions are:
American Airlines Group = +10.1% absolute return (equivalent to +60.4% annualized return for the 61 day holding period)
Baidu Inc. = +8.7% absolute return (equivalent to +57.4% annualized return for the 55 days holding period)
Chevron Corporation = +1.7% absolute return (equivalent to +11.9% annualized return for the 51 day holding period)
EMC Corp (position #1) = +2.2% absolute return (equivalent to +15.9% annualized return for the 51 days holding period)
EMC Corp (position #2) = +5.1% absolute return (equivalent to +39.9% annualized return for the 47 days holding period)
iShares MSCI China ETF = =1.7% absolute return (equivalent to +19.8% annualized return for the 31 days holding period)
Google Inc = -3.2% absolute return (equivalent to -20.5% annualized return for the 57 days holding period)
Micron Technology Inc. = +4.5% absolute return (equivalent to +35.1% annualized return for the 47 days holding period)
The detailed transactions history and results for each of these 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.
- Three of the eleven positions (Agnico Eagle Mines, Goldcorp, and Halliburton) ended at expiration with the price of the stocks below the strike prices. So the respective options expired and the long shares were retained in the Covered Calls Advisor Portfolio. A decision will be made soon to either sell these shares or to establish a covered calls position by selling Dec2014 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 along with the detailed transactions to-date for each stock position.
Details of the eight closed positions summarized above and the associated return-on-investment results are as follows:
1. American Airlines Group (AAL) -- Closed
The transactions were 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.
11/21/2014 Nov2014 options closed in-the-money and the stock was assigned at the $35.00 strike price
The overall performance result (including commissions) for these AAL transactions was:
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 (AAL closed above $35.00 at Nov2014 expiration): +$0.00
= ($35.00-$35.00)*400 shares
Total Net Profit (AAL above $35.00 strike price at Nov2014 options expiration):+$1,412.10
= (+$1,412.10 +$0.00 +$0.00)
Absolute Return (AAL was above $35.00 strike price at Nov2014 options expiration and Put options thus expired worthless): +10.1%
= +$1,412.10/$14,000.00
Annualized Return: +60.4%
= (+$1,412.10/$14,000.00)*(365/61 days)
2. Baidu Inc. (BIDU) -- Closed
The transactions were 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.
11/21/2014 The Nov2014 call options were in-the-money and the stock was assigned at the the $220 strike price.
The overall performance result (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 (BIDU closed above $220.00 at Nov2014 expiration): +$500.00
= ($220.00-$215.00)*100 shares
Total Net Profit (BIDU closed above $220.00 strike price at Nov2014 options expiration):+$1,860.60
= (+$1,360.60 +$0.00 +$500.00)
Absolute Return (BIDU closed above the$220.00 strike price at Nov2014 options expiration): +8.7%
= +$1,860.60/$21,500.00
Annualized Return: +57.4%
= (+$1,860.60/$21,500.00)*(365/55 days)
3
. Chevron Corporation (CVX) -- Closed
The transactions were as follows:
10/01/2014 Bought 300 CVX shares @ $118.54
10/01/2014 Sold 3 CVX Oct2014
$118.00 Call Options @ $2.14
Note: the price of CVX was $118.54 today when
these options were sold.
10/17/2014 3 CVX Call options expired
10/22/2014 Sold 3 Nov2014 $115.00 Calls @ $2.40
Note: the price of CVX was $115.46 when these options were sold
11/21/2014 Nov2014 call options assigned since stock about $115.00 strike price
The overall performance result for this CVX position was as follows:
Stock Purchase Cost: $35,570.95
= ($118.54*300+$8.95 commission)
Net Profit:
(a) Options Income: +$1,339.60
= 300*($2.14+$2.40) - 2*$11.20
commissions
(b) Dividend Income: +$321.00 = $1.07 * 300 shares
(c) Capital Appreciation (CVX
assigned at $115.00) = -$1,070.95
= ($115.00-$118.54)*300 - $8.95
commissions
Total Net Profit (CVX assigned at $115.00): +$589.65
=
(+$1,339.60 +$321.00 -$1,070.95)
Absolute Return Upon Assignment (at $115.00):
+1.7%
= +$589.65/$35,570.95
Annualized Return:
+11.9%
= (+$589.65/$35,570.95)*(365/51 days)
4. EMC Corp (EMC) -- Closed
The transactions were as follows:
10/02/2014 Bought 400 EMC shares @ $28.27
10/02/2014 Sold 4 EMC Oct2014
$28.00 Call Options @ $.75
Note: the price of EMC was $28.27 today when these
options were sold.
10/17/2014 4 Oct12014 Call options expired
10/22/2014 Sold 4 EMC Nov2014 $27.50 Call Options @ $.46
Note: the price of EMC was $26.87 when these options were sold
11/21/2014 Nov2014 call options assigned since stock above $27.50 strike price
The performance result (including
commissions) for these EMC covered calls is as follows:
Stock Purchase Cost:
$11,316.95
= ($28.27*400+$8.95 commission)
Net Profit:
(a) Options
Income: +$460.10
= 400*($.75+$.46) - 2*$11.95 commissions
(b) Dividend Income:
+$0.00
(c) Capital Appreciation (EMC assigned at $27.50) = -$208.95
=
($27.50-$28.27)*400 - $8.95 commissions
Total Net Profit (EMC assigned
at $27.50): +$251.15
= (+$460.10 +$0.00 -$208.95)
Absolute Return: +2.2%
= +$251.15/$11,316.95
Annualized Return: +15.9%
= (+$251.15/$11,316.95)*(365/51 days)
5. EMC Corp (EMC) -- Closed
The transactions were as follows:
10/07/2014 Bought 400 EMC shares @ $28.33
10/07/2014 Sold 4 EMC Nov2014 $29.00 Call Options @ $.84
Note: the price of EMC was $28.48 today when these options were sold.
11/21/2014 Nov2014 call options closed above the $29.00 strike price, so the EMC stock shares were assigned.
The overall performance result (including commissions) for these EMC covered calls was follows:
Stock Purchase Cost: $11,340.95
= ($28.33*400+$8.95 commission)
Net Profit:
(a) Options Income: +$324.05
= 400*$.84 - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (EMC closed above $29.00 strike price) = +$259.05
= ($29.00-$28.33)*400 - $8.95 commissions
Total Net Profit (EMC closed above $29.00 strike price at Nov2014 options expiration): +$583.10
= ($324.05+$0.00+$259.05)
Absolute Return: Stock Assigned (at $29.00 strike price): +5.1%
= +$583.10/$11,340.95
Annualized Return: +39.9%
= (+$583.10/$11,340.95/$11,316.95)*(365/47 days)
6
. iShares MSCI China ETF (FXI) -- Closed
The transactions were as follows:
10/22/2014 Bought 400 FXI shares @ $38.48
10/22/2014 Sold 4 FXI Nov2014 $38.00 Call Options @ $1.18
Note: the price of FXI was $38.48 today when these options were sold.
11/21/2014 Call options closed above $38 strike price at Nov2014 expiration and 400 shares called away
The performance result (including commissions) for these FXI covered calls is as follows:
Stock Purchase Cost: $15,400.95
= ($38.48*400+$8.95 commission)
Net Profit:
(a) Options Income: +$460.05
= 400*$1.18 - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (FXI assigned at $38.00 strike price at Nov2014 expiration)
= -$200.95
= ($38.00-$38.48)*400 - $8.95 commissions
Total Net Profit (FXI assigned at $38.00): +$259.10
= (+$460.05 +$0.00 -$200.95)
Absolute Return upon Assignment (at $38.00): +1.7%
= +$259.10/$15,400.95
Annualized Return: +19.8%
= (+$259.10/$15,400.95)*(365/31 days)
7
. Google Inc. (GOOG) -- Closed
The transactions were:
09/25/2014 Sold
1 Oct2014 $580.00 Put @ $13.60
Note: The price of Google was $582.05 when
this transaction was executed.
10/17/2014 1 Oct2014 Put option expired
10/22/2014 Sold 1 Nov2014 $530.00 Call option @ $18.00
Note: the price of GOOG was $538.20 when this Call option was sold
11/21/2014 the Call option was in-the-money and the stock was assigned at the $530.00 strike price upon Nov2014 expiration
The performance result (including commissions) for this Google
transaction was follows:
100% Cash-Secured Cost Basis: $58,000.00 =
$580.00*100
Note: the price of GOOG was $582.05 when the Put option was
sold.
Net Profit:
(a) Options Income: +$3,140.60
= ($13.60+$18.00)*100
shares - 2*$9.70 commissions
(b) Dividend Income: +$0.00
(c) Capital
Appreciation (GOOG closed above $530.00 at Nov2014 expiration):
-$5,000.00
=
($530.00-$580.00)*100 shares
Total Net Profit (GOOG was above $530.00
strike price at Nov2014 options expiration):
-$1,859.40
= (+$3,140.60 +$0.00
-$5,000.00)
Absolute Return (GOOG was above $530.00 at Nov2014 options
expiration): -3.2%
=
-$1,859.40/$58,000.00
Annualized Return (GOOG is above $530.00 at
expiration): -20.5%
= (-$1,859.40/$58,000.00)*(365/57 days)
8
. Micron Technology Inc. (MU) -- Closed
The transactions were 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.
11/21/2014 the Call options were in-the-money and the stock was assigned at the $31.00 strike price upon Nov2014 expiration
The overall performance result (including commissions) for
these transactions was 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 (MU was above $31.00 at Nov2014 expiration): +$0.00
= ($31.00-$31.00)*400 shares
Total Net Profit (MU was above $31.00 strike price at Nov2014 options expiration):+$560.10
= (+$560.10 +$0.00 +$0.00)
Absolute Return (MU was above $31.00 at Nov2014 options expiration): +4.5%
= +$560.10/$12,400.00
Annualized Return: +35.1%
= (+$560.10/$12,400.00)*(365/47 days)
