Last Friday, the November 17th, 2017 Covered Calls position in Wynn Resorts Ltd. (ticker symbol WYNN) expired with the stock price at $152.28, below the $152.50 strike price -- so the Call options expired and the 100 shares were retained in the Covered Calls Advisor's Portfolio. The stock moved higher this morning at the market opening and the position was closed out by selling the 100 shares at $154.71. As detailed below, this weekly Covered Calls position achieved a return-on-investment result of +2.1% absolute
return in 6 days (equivalent to a +130.5% annualized
return-on-investment).
Wynn Resorts Ltd. (WYNN) -- New Covered Calls Position
The transactions were as follows:
11/14/2017 Bought 100 shares of Wynn Resorts stock @ $153.90 per share
11/14/2017 Sold 1 WYNN Nov. 17th, 2017 $152.50 Call option @ $2.00 per share
Note: this was a simultaneous Buy/Write transaction with relatively good options liquidity of 1,754 open interest contracts. The implied volatility of the Call options was 17.9 when this position
was established.
11/17/2017 The WYNN 11/17/2017 $152.50 Call option expired and the 100 shares of stock was retained. Note: the price of the stock was $152.28 upon the options expiration.
11/20/2017 Sold 100 WYNN shares at $154.71.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $15,195.62
= ($153.90 - $2.00)* 100 shares + $5.62 commissions
Net Profit Components:
(a) Options Income: +$200.00
= ($2.00* 100 shares)
(b) Dividend Income: +$50.00
= $.50/share * 100 shares
(c) Capital Appreciation: -$76.05
= ($154.71 -$153.90)* 100 shares - $4.95 commission
Total Net Profit: +$326.05
= (+$200.00 options income +$50.00 dividend income +$76.05 capital appreciation)
Absolute Return: +2.1%
= +$326.05/$15,195.62
Equivalent Annualized Return: +130.5%
= (+$326.05/$15,195.62)*(365/6 days)