The Covered Calls Advisor Portfolio (CCAP) contained eleven positions with October 2015 expirations. The results are as follows:
- Ten of the eleven positions (Amgen Inc., Apple Inc., Dow Chemical Co., EMC Corp, Enterprise Products Partners LP, General Motors Co., JPMorgan Chase and Co., MetLife Inc., Micron Technology Inc., and Prudential Financial Inc.) were closed out at expiration. This was the optimal outcome for these positions in that the maximum potential return-on-investment (ROI) results were achieved for these positions. The results for these closed positions are:
The 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. New positions will be posted on this site on the same day they are established.
- One of the eleven positions (United Continental Holdings Inc.) ended at expiration with the price of the stock below the strike price, so the 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 holding. When this decision is made and the accompanying transaction is completed, a post will be made on this blog on the same day along with the detailed transactions to-date.
Details of the ten closed positions summarized above and the associated return-on-investment results are as follows:
09/21/2015 Sold 2 Amgen Inc. Oct2015 $140.00 Puts @ $2.54
Note: The price of AMGN was $147.10 when this transaction was executed.
The Covered Calls Advisor does not use margin, so the detailed
information on this position and the result shown below reflect
the fact that this position was established using 100% cash
securitization for the two Put options sold.
The overall performance result (including commissions) for this transaction was as follows:
(c) Capital Appreciation (If Amgen stock is above $140.00 strike price at Oct2015 expiration): +$0.00
Total Net Profit (Amgen stock closed above $140.00 strike price upon the Oct2015 options expiration): +$497.55
= (+$497.55 options income +$0.00 dividend income +$0.00 capital appreciation)
09/22/2015 Bought 200 Apple Inc. shares @ $113.58
Note: the price of AAPL was $113.71 today when this options transaction was executed.
10/16/2015 2 AAPL Call options assigned, so the 200 shares of Apple stock were sold at the $110.00 strike price
(c) Capital Appreciation (AAPL closed above $110.00 strike price at Oct2015 expiration): -$724.95
Total Net Profit (AAPL was above $110.00 strike price at Oct2015 options expiration): +$424.60
3. Dow Chemical Co. (DOW) -- Closed
The transactions were as follows:
09/18/2015 Bought 200 DOW shares @ $43.29
09/18/2015 Sold 2 DOW Oct2015 $42.00 Call options @ $2.04
09/28/2015 Ex-dividend of $.42 per share
10/16/2015 2 DOW Call options assigned, so the 200 shares of DOW stock were sold at the $42.00 strike price
Note: the price of DOW stock was $47.62 upon Oct2015 options expiration
The overall performance result (including commissions) for
this Dow Chemical Co. (DOW) covered calls position was as follows:
Stock Purchase Cost: $8,666.95
= ($43.29*200+$8.95 commission)
Net Profit:
(a) Options Income: +$397.55
= ($2.04*200 shares) - $10.45 commissions
(b) Dividend Income: +$84.00
= ($.42 dividend per share x 200 shares)
(c) Capital Appreciation (Stock assigned at $42.00 at Oct2015 expiration): -$266.95
+($42.00-$43.29)*200 - $8.95 commissions
Total Net Profit (Stock assigned at $42.00 at Oct2015 expiration): +$214.60
= (+$397.55 options income +$84.00 dividend income -$266.95 capital appreciation)
Absolute Return: +2.5%
= +$214.60/$8,666.95
Annualized Return: +31.2%
= (+$214.60/$8,666.95)*(365/29 days)
The transactions were as follows:
09/22/2015 Bought 400 EMC Corp shares @ $23.71
09/22/2015 Sold 4 EMC Oct2015 $23.00 Call options @ $1.08
Note: the stock purchase and the sale of these call options was done as one simultaneous buy/write transaction.
09/29/2015 Ex-dividend of $46.00 = ($.115 x 400 shares)
10/16/2015 4 EMC Call options assigned, so the 400 shares of EMC stock were sold at the $23.00 strike price
Note: the price of EMC stock was $27.77 upon Oct2015 options expiration
The overall performance result (including commissions) for
this EMC Corp (EMC) covered calls position was as follows:
Stock Purchase Cost: $9,492.95
= ($23.71*400+$8.95 commission)
Net Profit:
(a) Options Income: +$420.05
= ($1.08*400 shares) - $11.95 commissions
(b) Dividend Income (Stock assigned at Oct2015 expiration): +$46.00
= ($.115 dividend per share x 400 shares); or
(c) Capital Appreciation (Stock assigned at $23.00 at Oct2015 expiration): -$292.95
+($23.00-$23.71)*400 - $8.95 commissions
Total Net Profit (Stock assigned at $23.00 at Oct2015 expiration): +$173.10
= (+$420.05 options income +$46.00 dividend income -$292.95 capital appreciation)
Absolute Return: +1.8%
= +$173.10/$9,492.95
Annualized Return: +26.6%
= (+$173.10/$9,492.95)*(365/25 days)
The transactions were as follows:
09/11/2015 Bought 200 Enterprise Products Partners LP shares @ $26.40
09/11/2015 Sold 2 EPD Oct2015 $25.00 Call Options @ $2.10
10/16/2015 2 EPD Call options assigned, so the 200 shares of EPD stock were sold at the $25.00 strike price
Note: the price of EPD stock was $28.89 upon Oct2015 options expiration
The performance result (including commissions) for these
Enterprise Products Partners LP covered calls was as follows:
Stock Purchase Cost: $5,288.95
= ($26.40*200+$8.95 commission)
Net Profit:
(a) Options Income: +$409.55
= 200*$2.10 - $10.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (EPD stock assigned at $25.00) = -$288.95
= ($25.00-$26.40)*200 - $8.95 commissions
Total Net Profit (EPD assigned at $25.00): +$120.60
= (+$409.55 +$0.00 -$288.95)
Absolute Return: +2.3%
= +$120.60/$5,288.95
Annualized Return: +22.8%
= (+$120.60/$5,288.95)*(365/36 days)
6. General Motors Co. (GM) -- Closed
The transactions were as follows:
09/22/2015 Bought 300 General Motors Co. shares @ $29.67
09/22/2015 Sold 3 GM Oct2015 $29.00 Call options @ $1.32
Note: the stock purchase and the sale of these call options was done as one simultaneous buy/write transaction.
10/16/2015 3 GM Call options assigned, so the 300 shares of GM stock were sold at the $29.00 strike price
Note: the price of GM stock was $33.15 upon Oct2015 options expiration
The overall performance result (including commissions) was as follows:
Bought 300 shares GM: $8,909.95
= $29.67*300 + $8.95 commission
Net Profit:
(a) Options Income: +$384.80
= ($1.32*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (GM closed above $29.00 strike price at Oct2015 expiration): -$209.95
= ($29.00-$29.67)*300 shares - $8.95 commissions
Total Net Profit (GM above $29.00 strike price at Oct2015 options expiration): +$174.85
= (+$384.80 options income +$0.00 dividend income -$209.95 capital appreciation)
Absolute Return: +2.0%
= +$174.85/$8,909.95
Annualized Return: +28.7%
= (+$174.85/$8,909.95)*(365/25 days)
7. JPMorgan Chase & Co. (JPM) -- Closed
The transactions were as follows:
09/18/2015 Bought 200 JPM shares @ $60.93
09/18/2015 Sold 2 JPM Oct2015 $60.00 Call options @ $2.23
10/02/2015 Ex-dividend of $88.00 = (200 shares x $.44 per share)
10/16/2015 2 JPM Call options assigned, so the 200 shares of JPM stock were sold at the $60.00 strike price
Note: the price of JPM stock was $62.43 upon Oct2015 options expiration
The overall performance result (including commissions) for
this JPMorgan Chase Co. (JPM) covered calls position was as follows:
Stock Purchase Cost: $12,194.95
= ($60.93*200+$8.95 commission)
Net Profit:
(a) Options Income: +$435.55
= ($2.23*200 shares) - $10.45 commissions
(b) Dividend Income (JPM stock assigned at Oct2015 expiration): +$88.00
= ($.44 dividend per share x 200 shares)
(c) Capital Appreciation (JPM stock assigned at $60.00 at Oct2015 expiration): -$194.95
+($60.00-$60.93)*200 - $8.95 commissions
Total Net Profit (Stock assigned at $60.00 at Oct2015 expiration): +$328.60
= (+$435.55 +$88.00 -$194.95)
Absolute Return: +2.7%
= +$328.60/$12,194.95
Annualized Return: +33.9%
= (+$328.60/$12,194.95)*(365/29 days)
8. MetLife Inc. (MET) -- Closed
The transactions were as follows:
08/31/2015 Sold 4 MetLife Inc. Sep2015 $48.00 Puts @ $.96
Note: The price of MET was $49.55 when this transaction was executed.
09/18/2015 4 MET Sep2015 Put options exercised and 400 shares of MET purchased at $48.00 strike price
Note: the price of MET was $46.52 upon Sep2015 options expiration
09/21/2015 Sold 4 MET $47.50 Oct2015 Call options @ $1.25
Note: the price of MET was $47.20 when this transaction was made
10/16/2015 4 MET Call options assigned, so the 400 shares of MET stock were sold at the $47.50 strike price
Note: the price of MET stock was $48.84 upon Oct2015 options expiration
The overall performance results (including commissions) for these transactions was as follows:
100% Cash-Secured Cost Basis: $19,200.00
= $48.00*400
Net Profit:
(a) Options Income: +$860.10
= ($.96+$1.25) *400 shares - 2*$11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (MET closed above $47.50 strike price at Oct2015 expiration): -$200.00
= ($47.50 - $48.00)*400 shares
Total Net Profit (MET stock was above $47.50 strike price upon the Oct2015 options expiration): +$660.10
= (+$860.10 options income +$0.00 dividend income -$200.00 capital appreciation)
Absolute Return: +3.4%
= +$660.10/$19,200.00
Annualized Return: +27.3%
= (+$660.10/$19,200.00)*(365/46 days)
9. Micron Technology Inc. (MU) -- Closed
The transactions were as follows:
08/12//2015 Sold 7 MU 100% cash-secured $17.00 Put options @ $.78
Note: The price of MU was $17.66 when this transaction was executed.
09/18/2015 7 MU Sep2015 Put options exercised and 700 shares of MU purchased at $17.00 strike price
Note: the price of MU was $15.50 upon Sep2015 options expiration
09/21/2015 Sold 7 MU $17.00 Oct2015 Call options @ $.55
Note: the price of MU was $15.80 when this transaction was made
10/16/2015 7 MU Call options assigned, so the 700 shares of MU stock were sold at the $17.00 strike price
Note: the price of MU stock was $18.50 upon Oct2015 options expiration
The overall performance results (including commissions) for these transactions was as follows:
100% Cash-Secured Cost Basis: $11,900.00
= $17.00*700
Net Profit:
(a) Options Income: +$902.60
= ($.78+$.55) * 700 shares - 2*$14.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (MU was above $17.00 strike price at Oct2015 expiration): +$0.00
= ($17.00 - $17.00)*700 shares
Total Net Profit (MU stock wass above $17.00 strike price upon the Oct2015 options expiration): +$902.60
= (+$902.60 +$0.00 +$0.00)
Absolute Return (MU above $17.00 strike price at Oct2015 options expiration): +7.6%
= +$902.60/$11,900.00
Annualized Return: +42.6%
= (+$902.60/$11,900.00)*(365/65 days)
10. Prudential Financial Inc. (PRU) -- Closed
The transaction was as follows:
09/22/2015 Sold 2 PRU Oct2015 $75.00 100% cash-secured Put options @ $1.95
Note: the price of PRU was $75.60 today when this transaction was executed.
10/16/2015 2 PRU Oct2015 $75.00 Put options expired
Note: the price of Prudential was $79.27 upon Oct2015 options expiration
The Covered Calls Advisor does not use margin, so the detailed
information on this position and the result shown below
reflect the fact that this position was established using 100% cash
securitization for the two Put options sold.
The overall performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $15,000.00
= $75.00*200
Note: the price of PRU was $75.60 when these options were sold
Net Profit:
(a) Options Income: +$379.55
= ($1.95*200 shares) - $10.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (PRU was above $75.00 strike price at Oct2015 expiration): +$0.00
= ($75.00-$75.00)*200 shares
Total Net Profit (PRU was above $75.00 strike price at Oct2015 options expiration): +$379.55
= (+$379.55 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +2.5%
= +$379.55/$15,000.00
Annualized Return: +36.9%
= (+$379.55/$15,000.00)*(365/25 days)
Today, the Covered Calls Advisor closed the short 100% cash-secured Put options position by buying-to-close the two Apple Inc. (Symbol AAPL) Nov2015 $115.00 Put options. As detailed below, this investment resulted in a +3.7% absolute
return in 30 days (equivalent to a +45.4% annualized
return-on-investment).
