- Four of the eight positions (Dow Chemical Co., General Motors Co., JPMorgan Chase and Co., and United Continental Holdings Inc.) were closed out at expiration. This was the optimal result for these positions in that the maximum potential return-on-investment (ROI) results were achieved for these positions. The annualized ROI for these closed positions are:
- Dow Chemical Co. = +1.9% absolute return (equivalent to +19.1% annualized return for the 37 days holding period)
- General Motors Co. = +2.6% absolute return (equivalent to +24.6% annualized return for the 39 days holding period)
- JPMorgan Chase and Co. = +1.7% absolute return (equivalent to +35.3% annualized return for the 18 days holding period)
- United Continental Holdings Inc. = +3.6% absolute return (equivalent to +30.6% annualized return for the 43 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 eight positions (International Paper Co., iShares China Large-Cap ETF, MetLife Inc., and Micron Technology 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 four closed positions summarized above and the associated return-on-investment results are as follows:
1. Dow Chemical Co. (DOW) -- Closed
The transactions were as follows:
08/13//2015 Sold 3 DOW Sep2015 $43.00 100% cash-secured Put options @ $.87
Note: The price of DOW was $45.25 when this transaction was executed.
09/18/2015 3 DOW Sep2015 $43.00 Put options expired
Note: The price of DOW was $43.31 upon Sep2015 options expiration
The Covered Calls Advisor does not use margin, so the detailed information on this position and the results shown below reflect the fact that this position was established using 100% cash securitization for the three Put options sold.
The overall performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $12,908.95
= $43.00*300 + $8.95
Net Profit:
(a) Options Income: +$249.80
= ($.87*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation: (DOW stock was above $43.00 strike price at Sep2015 expiration): +$0.00
= ($43.00-$43.00)*300 shares
Total Net Profit: +$249.80
= (+$249.80 +$0.00 +$0.00)
Absolute Return: +1.9%
= +$249.80/$12,908.95
Annualized Return: +19.1%
= (+$249.80/$12,908.95)*(365/37 days)
2. General Motors Co. (GM) -- Closed
The transactions were as follows:
08/11/2015 Bought 300 GM shares @ $30.93
08/11/2015 Sold 3 GM Sep2015 $30.00 Call options @ $1.45
09/10/2015 Ex-dividend of $.36 per share
09/18/2015 300 GM shares sold at $30.00 strike price
Note: The price of GM stock was $30.51 upon Sep2015 options expiration
The performance result (including commissions) for this General Motors (GM) covered calls position was as follows:
Stock Purchase Cost: $9,287.95
= ($30.93*300+$8.95 commission)
Net Profit:
(a) Options Income: +$423.80
= ($1.45*300 shares) - $11.20 commissions
(b) Dividend Income (GM stock assigned at Sep2015 expiration): +$108.00
= ($.36 dividend per share x 300 shares)
(c) Capital Appreciation: -$287.95
+($30.00-$30.93)*300 - $8.95 commissions
+($30.00-$30.93)*300 - $8.95 commissions
Total Net Profit (GM stock assigned at $30.00 at Sep2015 options expiration): +$243.85
= (+$423.80 +$108.00 -$287.95)
3. JPMorgan Chase and Co. (JPM) -- Closed
The transactions were as follows:
09/01//2015 Sold 3 JPM 100% cash-secured $60.50 Put options @ $1.09
Note: The price of JPM was $62.54 when this transaction was executed.
09/18/2015 3 JPM Sep2015 $60.50 Put options expired
Note: The price of JPM was $60.94 upon Sep2015 options expiration
The performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $18,158.95
= $60.50*300 + $8.95
Net Profit:
(a) Options Income: +$315.80
= ($1.09*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (JPM stock was above $60.50 strike price at Sep2015 expiration): +$0.00
= ($60.50-$60.50)*300 shares
Total Net Profit (JPM stock was above $60.50 strike price at Sep2015 options expiration): +$315.80
= (+$315.80 +$0.00 +$0.00)
Absolute Return: +1.7%
= +$315.80/$18,158.95
Annualized Return: +35.3%
= (+$315.80/$18,158.95)*(365/18 days)
4. United Continental Holdings Inc. (UAL) -- Closed
The transactions were as follows:
08/07/2015 Sold 3 UAL 100% cash-secured $55.00 Put options @ $2.02
Note: The price of UAL was $56.84 when this transaction was executed.
09/18/2015 3 UAL Sep2015 $55.00 Put options expired
Note: The price of UAL was $60.31 upon Sep2015 options expiration
The performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $16,500.00
= $55.00*300
Net Profit:
(a) Options Income: +$594.80
= ($2.02*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (UAL stock was above $55.00 strike price at Sep2015 expiration): +$0.00
= ($55.00-$55.00)*300 shares
Total Net Profit: +$594.80
= (+$594.80 +$0.00 +$0.00)
Absolute Return: +3.6%
= +$594.80/$16,500.00
Annualized Return: +30.6%
= (+$594.80/$16,500.00)*(365/43 days)
Absolute Return: +2.6%
= +$243.85/$9,287.95
Annualized Return: +24.6%
= (+$243.85/$9,287.95)*(365/39 days)
3. JPMorgan Chase and Co. (JPM) -- Closed
The transactions were as follows:
09/01//2015 Sold 3 JPM 100% cash-secured $60.50 Put options @ $1.09
Note: The price of JPM was $62.54 when this transaction was executed.
09/18/2015 3 JPM Sep2015 $60.50 Put options expired
Note: The price of JPM was $60.94 upon Sep2015 options expiration
The performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $18,158.95
= $60.50*300 + $8.95
Net Profit:
(a) Options Income: +$315.80
= ($1.09*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (JPM stock was above $60.50 strike price at Sep2015 expiration): +$0.00
= ($60.50-$60.50)*300 shares
Total Net Profit (JPM stock was above $60.50 strike price at Sep2015 options expiration): +$315.80
= (+$315.80 +$0.00 +$0.00)
Absolute Return: +1.7%
= +$315.80/$18,158.95
Annualized Return: +35.3%
= (+$315.80/$18,158.95)*(365/18 days)
4. United Continental Holdings Inc. (UAL) -- Closed
The transactions were as follows:
08/07/2015 Sold 3 UAL 100% cash-secured $55.00 Put options @ $2.02
Note: The price of UAL was $56.84 when this transaction was executed.
09/18/2015 3 UAL Sep2015 $55.00 Put options expired
Note: The price of UAL was $60.31 upon Sep2015 options expiration
The performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $16,500.00
= $55.00*300
Net Profit:
(a) Options Income: +$594.80
= ($2.02*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (UAL stock was above $55.00 strike price at Sep2015 expiration): +$0.00
= ($55.00-$55.00)*300 shares
Total Net Profit: +$594.80
= (+$594.80 +$0.00 +$0.00)
Absolute Return: +3.6%
= +$594.80/$16,500.00
Annualized Return: +30.6%
= (+$594.80/$16,500.00)*(365/43 days)
