- Seven of the eleven positions (Alcoa Inc., Baidu Inc., BP Plc ADR, General Motors Co., Dow Chemical Co., Virgin America Inc., and Yamana Gold 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 positions was established. The annualized ROI for these closed positions are:
- Alcoa Inc. = -8.1% absolute return (equivalent to -55.8% annualized return for the 53 days holding period)
- Baidu Inc. = +1.9% absolute return (equivalent to +28.2% annualized return for the 24 days holding period)
- BP Plc ADR = +1.6% absolute return (equivalent to +16.0% annualized return for the 37 days holding period)
- General Motors Co. = +1.2% absolute return (equivalent to +27.4% annualized return for the 16 days holding period)
- Dow Chemical Co. = +2.1% absolute return (equivalent to +25.4% annualized return for the 30 days holding period)
- Virgin America Inc. = +2.9% absolute return (equivalent to +32.8% annualized return for the 32 days holding period)
- Yamana Gold Inc. = +11.4% absolute return (equivalent to +70.7% annualized return for the 59 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.
- Four of the eleven positions (Google Inc., Micron Technology Inc., United Continental Holdings Inc. and YRC Worldwide Inc.) ended at expiration with the price of the stocks below the strike prices. So the respective options expired and the long shares are now 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 future 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 position.
Details of the nine closed positions summarized above and the associated return-on-investment results are as follows:
1. Alcoa Inc. (AA) -- Closed
The transactions were as follows:
02/23/2015 Sold 3 AA Mar2015 $15.00 100% cash-secured Put options @ $.33
Note: The price of AA was $15.47 when this transaction was executed.
03/20/2015 3 AA Mar2015 Put options assigned and 300 shares of AA purchased at $15.00 strike price
Note: the price of Alcoa was $12.97 upon Mar2015 options expiration.
03/23/2015 Sold 3 Apr2015 $13.00 Call options @ $.53
Note: AA stock was $13.02 when these options were sold.
04/17/2015 3 Call options were exercised and the 300 shares of Alcoa stock were sold at the $13.00 strike price
Note: the price of AA was $13.46 upon options expiration
The overall performance result (including commissions) for this Alcoa position was as follows:
100% Cash-Secured Cost Basis: $4,500.00
= $15.00*300
Net Profit:
(a) Options Income: +$235.60
= ($.33+$.53)*300 shares - 2*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$600.00
= ($13.00 - $15.00)*300 shares
Total Net Profit: -$364.40
= (+$235.60 +$0.00 -$600.00)
Absolute Return: -8.1%
= -$364.40/$4,500.00
Annualized Return: -55.8%
= (-$364.40/$4,500.00)*(365/53 days)
2. Baidu Inc. (BIDU) -- Closed
The transactions were as follows:
03/25/2015 Sold 2 BIDU Apr2015 $205.00 Put Options @ $3.90
Note: the price of BIDU was $207.85 today when these two Put options were sold.
04/17/2015 2 Put options expired
Note: the price of BIDU was $207.87 when these Put options expired
The overall performance result (including commissions) for these Baidu short Put options is as follows:
Stock Purchase Cost: $41,008.95
= ($205.00*200+$8.95 commission)
Net Profit:
(a) Options Income: +$769.55
= 200*$3.90 - $10.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation = -$8.95
= ($205.00-$205.00)*200 - $8.95 commissions
Total Net Profit: +$760.60
= (+$769.55 +$0.00 -$8.95)
Absolute Return: +1.9%
= +$760.60/$41,008.95
Annualized Return: +28.2%
= (+$760.60/$41,008.95)*(365/24 days)
3. BP Plc ADR (BP) -- Closed
The transactions were as follows:
03/13/2015 Bought 200 BP shares @ $37.22
03/13/2015 Sold 2 BP Apr2015 $36.00 Call Options @ $1.92
Note: the price of BP was $37.22 today when these options were sold.
04/17/2015 2 BP Call options were exercised and the 200 shares of BP stock were sold at the $36.00 strike price
Note: the price of BP was $42.89 upon options expiration
The overall performance result (including commissions) for these BP Plc ADR covered calls is as follows:
Stock Purchase Cost: $7,452.95
= ($37.22*200+$8.95 commission)
Net Profit:
(a) Options Income: +$373.55
= 200*$1.92 - $10.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation = -$252.95
= ($36.00-$37.22)*200 - $8.95 commissions
Total Net Profit: +$120.60
= (+$373.55 +$0.00 -$252.95)
Absolute Return: +1.6%
= +$120.60/$7,452.95
Annualized Return: +16.0%
= (+$120.60/$7,452.95)*(365/37 days)
4. General Motors Co. (GM) -- Closed
The transactions were as follows:
04/02/2015 Sold 3 GM Co. Apr2015 $36.00 Puts @ $.47
Note: The price of GM was $36.37 when this transaction was executed.
04/17/2015 3 GM Put options expired
Note: the price of GM was $36.64 when these Put options expired
The overall performance result (including commissions) for this transaction was as follows:
100% Cash-Secured Cost Basis: $10,800.00
= $36.00*300
Note: the price of GM was $36.37 when the Put options were sold.
Net Profit:
(a) Options Income: +$129.80
= ($.47*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation: +$0.00
= ($36.00-$36.00)*300 shares
Total Net Profit: +$129.80
= (+$129.80 +$0.00 +$0.00)
Absolute Return: +1.2%
= +$129.80/$10,800.00
Annualized Return: +27.4%
= (+$129.80/$10,800.00)*(365/16 days)
5. Dow Chemical Co. (DOW) -- Closed
The transactions were as follows:
03/19/2015 Bought 200 DOW shares @ $46.59
03/19/2015 Sold 2 DOW Apr2015 $46.00 Call options @ $1.24
Note: the price of DOW was $46.59 today when these Call options were sold.
03/27/2015 Upcoming ex-dividend of $.42 per share
04/17/2015 2 DOW Call options were exercised and the 200 shares of DOW stock were sold at the $46.00 strike price
Note: the price of DOW was $49.66 upon options expiration
The overall performance result (including commissions) for this Dow Chemical Co. (DOW) covered calls position was as follows:
Stock Purchase Cost: $9,326.95
= ($46.59*200+$8.95 commission)
Net Profit:
(a) Options Income: +$237.55
= ($1.24*200 shares) - $10.45 commissions
(b) Dividend Income: +$84.00
= ($.42 dividend per share x 200 shares)
(c) Capital Appreciation: -$126.95
+($46.00-$46.59)*200 - $8.95 commissions
+($46.00-$46.59)*200 - $8.95 commissions
Total Net Profit: +$194.60
= (+$237.55 +$84.00 -$126.95)
Absolute Return: +2.1%
= +$194.60/$9,326.95
Annualized Return: +25.4%
= (+$194.60/$9,326.95)*(365/30 days)
6. Virgin America Inc. (VA) -- Closed
The transactions were as follows:
03/18/2015 Sold 3 Virgin America Inc. Apr2015 $30.00 Puts @ $.90
Note: The price of VA was $32.03 when this transaction was executed.
04/17/2015 3 VA Put options expired
Note: the price of Virgina America stock was $30.55 when these Put options expired
A possible overall performance result (including commissions) for this transaction would be as follows:
100% Cash-Secured Cost Basis: $9,000.00
= $30.00*300
Note: the price of VA was $32.03 when these Put options were sold.
Net Profit:
(a) Options Income: +$258.80
= ($.90*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation: +$0.00
= ($30.00-$30.00)*300 shares
Total Net Profit: +$258.80
= (+$258.80 +$0.00 +$0.00)
Absolute Return: +2.9%
= +$258.80/$9,000.00
= (+$258.80/$9,000.00)*(365/32 days)
7. Yamana Gold Inc. (AUY) -- Closed
The transactions are as follows:
02/17/2015 Sold 10 Yamana Gold Mar2015 $4.00 Puts @ $.28
Note: The price of AUY was $3.99 when this transaction was executed.
03/20/2015 10 AUY Mar2015 Put options expired
Note: the price of Yamana Gold was $3.91 upon Mar2015 options expiration.
03/23/2015 Sold 10 Apr2015 $4.00 Call options @ $.21
Note: AUY stock was $4.01 when these options were sold.
04/17/2015 10 AUY Call options were exercised and the 1,000 shares of Yamana stock were sold at the $4.00 strike price
Note: the price of AUY was $4.02 upon options expiration
The overall performance result (including commissions) for these transactions was as follows:
100% Cash-Secured Cost Basis: $4,000.00
= $4.00*1,000
Note: the price of AUY was $4.00 when these Put options were sold.
Net Profit:
(a) Options Income: +$457.10
= ($.28 + $.21)*1,000 shares - 2*$16.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation: +$0.00
= ($4.00 - $4.00)*1,000 shares
Total Net Profit: +$457.10
= (+457.10 +$0.00 +$0.00)
Absolute Return: +11.4%
= +$457.10/$4,000.00
Annualized Return: +70.7%
= (+$457.10/$4,000.00)*(365/59 days)
