February 2016 Option Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained seventeen positions with February 2016 expirations.

I.  Ten of the seventeen positions were closed out at expiration. The overall average annualized return-on-investment for these ten positions was 19.9%.  The return-on-investment results for each position was:

• BB&T Corp. = +1.7% absolute return (+21.6% annualized return)
• Cal-Maine Foods Inc. = +9.4% absolute return (+43.1% annualized return)
• Capital One Financial Corp. = +1.5% absolute return (+29.1% annualized return)
• Delta Air Lines Inc. = +1.2% absolute return (+28.2% annualized return)
• Enterprise Products Partners LP = +5.6% absolute return (+70.7% annualized return)
• General Motors Co. = +2.5% absolute return (+29.8% annualized return)
• iShares MSCI Emerging Markets ETF = -3.9% absolute return (-19.5% annualized return)
• Polaris Industries Inc. = -5.4% absolute return (-22.7% annualized return)
• SPDR S&P 500 ETF = +2.3% absolute return (+26.7% annualized return)
• The Walt Disney Company = -1.2% absolute return (-7.3% annualized return)

As an example of how these returns were calculated, the details for the BB&T covered calls position is shown below.  The cash now 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.  Any new positions will be posted on this site on the same day they occur.

BB&T Corp. -- Covered Calls Position Closed at Expiration
The transactions were as follows:
01/22/2016 Bought 200 BBT shares @ $31.735
01/22/2016 Sold 2 BBT Feb2016 $30.00 Call options @ $2.09
02/10/2016 Ex-dividend of $54.00 ($.27 per share x 200 shares)
02/19/2016 At Feb2016 options expiration, BB&T stock closed above $30 strike price, so 200 shares sold at $30.00

The overall performance result (including commissions) for this BB&T Corp. (BBT) covered calls position was as follows:
Stock Purchase Cost: $6,282.95
= ($31.735*200 +$7.95 commission)

Net Profit:
(a) Options Income: +$408.55
= ($2.09*200 shares) - $9.45 commissions

(b) Dividend Income (BB&T stock assigned at Feb2016 expiration): +$54.00
= ($.27 dividend per share x 200 shares)

(c) Capital Appreciation (Stock assigned at $30.00 at Feb2016 expiration): -$354.95
+($30.00-$31.726)*200 - $7.95 commissions

Total Net Profit (Stock assigned at $30.00 at Feb2016 expiration): +$107.60

= (+$408.55 +$54.00 -$354.95)

Absolute Return (Stock assigned at $30.00 at Feb2016 expiration): +1.7%

= +$107.60/$6,282.95

Annualized Return: +21.6%

= (+$107.60/$6,282.95)*(365/29 days)

II.  Seven of the seventeen positions (Alibaba Group Holdings Ltd., General Motors Company, iShares China Large-Cap ETF, iShares MSCI South Korea ETF, JPMorgan Chase & Co., MetLife Inc., and Nationstar Mortgage Holdings Inc.) ended at expiration with the prices of the stocks below their 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 for each equity position.