- Four of the eleven positions (Alibaba Group Holding Ltd., AmTrust Financial Services Inc., Enterprise Products Partners LP, and Nationstar Mortgage Holdings 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:
- Alibaba Group Holding Ltd. = +5.0% absolute return (equivalent to +49.5% annualized return for the 37 days holding period)
- AmTrust Financial Services Inc. = +1.0% absolute return (equivalent to +23.4% annualized return for the 16 days holding period)
- Enterprise Products Partners LP = +3.2% absolute return (equivalent to +96.5% annualized return for the 12 days holding period)
- Nationstar Mortgage Holdings Inc. = +3.1% absolute return (equivalent to +45.3% annualized return for the 25 days holding period)
- Seven of the eleven positions (Avis Budget Group Inc., Cal-Maine Foods Inc., Devon Energy Corp, Goldman Sachs Group Inc., MetLife Inc., Kinder Morgan Inc., and Polaris Industries 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. Decisions will be made soon to either sell these shares or to establish covered calls positions by selling future Call options against the current long stock holdings. When these decisions are made and the accompanying transactions completed, posts to this blog will be made on the same day they occur along with the detailed transactions to-date.
Details of the four closed positions summarized above and their associated return-on-investment results are as follows:
The transactions were as follows:
11/12/2015 Sold 2 BABA 100% cash-secured $80.00 Put options @ $2.16
Note: the price of Alibaba was $78.90 today when this transaction was executed. The Covered Calls Advisor does not use margin, so the detailed information on this position and these results shown below reflect that this position was established using 100% cash securitization for the two Put options sold.
11/20/2015 Bought 200 shares BABA @ $80.00 strike price
Note: the price of BABA was $79.95 upon Nov2015 options expiration
11/23/2015 Established covered calls position by selling two BABA Dec2015 $77.50 Call options @ $4.45
12/18/2015 200 BABA shares sold at $77.50 strike price
Note: BABA shares closed at $82.65 at 12/18/2015 options expiration.
The overall performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $16,000.00
= $80.00*200
Net Profit:
(a) Options Income: +$1,303.10
= ($2.16+$4.45) * 200 shares - $9.45*2 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (BABA was above $77.50 strike price at Dec2015 expiration): -$500.00
= ($77.50 -$80.00)*200 shares
Total Net Profit: +$803.10
= (+$1,303.10 options income +$0.00 dividend income -$500.00 capital appreciation)
Absolute Return: +5.0%
= +$803.10/$16,000.00
Annualized Return: +49.5%
= (+$803.10/$16,000.00)*(365/37 days)
2. AmTrust Financial Services Inc.(AFSI) -- Postion Closed
12/03/2015 Sold 3 AFSI Dec2015 $60.00 100% cash-secured Put options @ $.65
Note: the price of AFSI was $62.55 today when this transaction was executed.
12/18/2015 3 AFSI Put options expired
Note: AFSI shares closed at $60.54 at 12/18/2015 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: $18,000.00
= $60.00*300
Net Profit:
(a) Options Income: +$184.80
= ($.65*300 shares) - $10.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (AFSI closed above $60.00 strike price at Dec2015 expiration): +$0.00
= ($60.00-$60.00)*300 shares
Total Net Profit (AFSI closed above $60.00 strike price at Dec2015 options expiration): +$184.80
= (+$184.80 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +1.0%
= +$184.80/$18,000.00
Annualized Return: +23.4%
= (+$184.80/$18,000.00)*(365/16 days)
3. Enterprise Products Partners (EPD) -- Position Closed
12/07/2015 Sold 3 EPD Dec2015 $21.00 100% cash-secured Put options @ $.70
Note: the price of EPD was $21.64 today when this transaction was executed.
12/18/2015 3 EPD Put options expired
Note: EPD shares closed at $23.43 at 12/18/2015 options expiration.
The overall performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $6,300.00
= $21.00*300
Net Profit:
(a) Options Income: +$199.80
= ($.70*300 shares) - $10.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (EPD was above $21.00 strike price at Dec2015 expiration): +$0.00
= ($21.00-$21.00)*300 shares
Total Net Profit: +$199.80
= (+$199.80 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +3.2%
= +$199.80/$6,300.00
Annualized Return: +96.5%
= (+$199.80/$6,300.00)*(365/12 days)
4. Nationstar Mortgage Holdings Inc. (NSM) -- Position Closed
The transactions were as follows: 11/24/2015 Sold 4 NSM Dec2015 $12.00 100% cash-secured Put options @ $.40
Note: the price of NSM was $12.89 today when this transaction was executed.
12/18/2015 4 NSM Put options expired
Note: NSM shares closed at $12.39 at 12/18/2015 options expiration.
The performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $4,800.00
= $12.00*400
Net Profit:
(a) Options Income: +$149.05
= ($.40*400 shares) - $10.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (NSM was above $12.00 strike price at Dec2015 expiration): +$0.00
= ($12.00-$12.00)*400 shares
Total Net Profit: +$149.05
= (+$149.05 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +3.1%
= +$149.05/$4,800.00
Annualized Return: +45.3%
= (+$149.05/$4,800.00)*(365/25 days)
