April 2016 Option Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained four positions with April 2016 expirations.

I.  Three of the four positions were closed out at expiration. The overall average annualized return-on-investment for these three positions was +21.1%.  The return-on-investment results for each position was:

• Bristol-Myers Squibb Co. = +2.1% absolute return (+24.1% annualized return)
• Celgene Corp. = +1.8% absolute return (+22.2% annualized return)
• Delta Air Lines Inc. = +1.4% absolute return (+17.1% annualized return)

As an example of how these returns were calculated, the details for the Bristol-Myers 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.

Bristol-Myers Squibb Co. -- Covered Calls Position Closed at Expiration
The transactions were as follows:
Stock Purchase Cost: $19,096.95
= ($63.63*300+$7.95 commission)

Net Profit:
(a) Options Income: +$636.75
= ($2.13*300 shares) - $2.25 commissions
(b) Dividend Income (BMY assigned at Apr2016 expiration): +$114.00
= ($.38 dividend per share x 300 shares)

(c) Capital Appreciation (BMY assigned at $62.50 at Apr2016 expiration): -$346.95
+($62.50-$63.63)*300 - $7.95 commissions

Total Net Profit: +$403.80

= (+$636.75 +$114.00 -$346.95)

Absolute Return: +2.1%

= +$403.80/$19,096.95

Annualized Return: +24.1%

= (+$403.80/$19,096.95)*(365/32 days)

II.  One of the four positions (Western Digital Corporation) ended at expiration with the price of the stock below the strike price, so the options expired and the long shares remained in the Covered Calls Advisor Portfolio.  Today, the 300 shares of WDC were sold at $40.21. 

The overall performance result (including commissions) for this Western Digital (WDC) covered calls position was as follows:
The transactions were:
03/14/2016 Bought 300 WDC shares @ $48.23
03/02/2016 Sold 3 WDC Apr2016 $45.00 Call options @ $4.43
Note: a simultaneous buy/write transaction was executed.
03/30/2016 Ex-dividend of $.50 per share
04/15/2016 3 WDC Apr2016 Call options expired.  
Note: the price of WDC was $40.49 at options expiration.
04/18/2016 Sold 300 WDC shares at $40.21

The overall performance result (including commissions) for this Western Digital covered calls position was as follows:
Stock Purchase Cost: $14,476.95
= ($48.23*300+$7.95 commission)

Net Profit:
(a) Options Income: +$1,326.75
= ($4.43*300 shares) - $2.25 commissions
(b) Dividend Income: +$150.00
= ($.50 dividend per share x 300 shares)

(c) Capital Appreciation: -$2,413.95
+($40.21-$48.23)*300 - $7.95 commissions

Total Net Profit: -$937.20

= (+$1,326.75 +$150.00 -$2,413.95)

Absolute Return: -6.5%

= -$937.20/$14,476.95

Annualized Return: -67.5%

= (-$937.20/$14,476.95)*(365/35 days)