Covered Calls Positions Continued in Caterpillar Inc. and Intel Corporation

Last Friday, the February 16th, 2018 Covered Calls positions in Caterpillar Inc. (ticker symbol CAT) and Intel Corp. (ticker INTC) expired with the stock prices below their strike prices.  So, the Call options expired and their stock shares were retained in the Covered Calls Advisor's Portfolio.  This morning, the Covered Calls Advisor continued both Covered Calls positions by selling next month (March 16th, 2018) Call options against both long stock positions. 

Some potential overall return-on-investment results for each position are: 

• Caterpillar Inc. -- A +4.4% absolute return in 47 days (equivalent to a +34.4%  annualized return if Caterpillar stock closes above the $155.00 strike price on the March 16th, 2018 expiration date.
• Intel Corp. -- A +1.0% absolute return in 46 days (equivalent to a +7.6% annualized return if Intel stock is above the $46.00 strike price on the March 16th expiration date.

The transactions to-date and potential return-on-investment results for both positions are detailed below. 

1. Caterpillar Inc. (CAT) -- Covered Call Position Continued

The transactions are as follows:
01/29/2018 Bought 100 shares of Caterpillar stock @ $160.12 per share 
01/29/2018 Sold 1 Caterpillar February 16th, 2018 $157.50 Call option @ $5.99 per share
Note: this was a simultaneous Buy/Write transaction
02/16/2018 1 CAT March 16th Call option expired and 100 shares of CAT stock were retained in the Covered Calls Advisor Portfolio
Note: the price of CAT stock was $156.29 upon the options expiration.
02/20/2018 Continuation of CAT Covered Call position by selling 1 Mar 16th, 2018 Call option at the $155.00 strike @ $6.00 per share
Note: CAT stock was at $157.68 when this transaction occurred


A possible overall performance result (including commissions) would be as follows:
Covered Call Cost Basis: $15,418.62
= ($160.12 - $5.99)* 100 shares + $5.62 commission

Net Profit Components:
(a) Options Income: +$1,199.00
= ($5.99 + $6.00) * 100 shares
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If CAT stock is above $155.00 strike price at Mar16th expiration): -$516.95
= ($155.00 -$160.12)* 100 shares - $4.95 commission

Total Net Profit: +$682.05
= (+$1,199.00 options income +$0.00 dividend income -$516.95 capital appreciation)

Absolute Return: +4.4%
= +$682.05/$15,418.62
Equivalent Annualized Return: +34.4%
= (+$682.05/$15,418.62)*(365/47 days)


2. Intel Corporation (INTC) -- Covered Calls Position Continued

An ex-dividend occurred on February 6th for $.30 per share. 

The transactions have been as follows:
01/30/2018 Bought 400 Intel shares @ $49.23
01/30/2018 Sold 4 Intel 02/16/2018 $47.50 Call options @ $2.04
Note: a simultaneous buy/write transaction was executed.
02/06/2018 Upcoming quarterly ex-dividend of $.30 per share
02/16/2018 4 Intel Feb. 16th Call options expired and 400 shares of Intel stock were retained in the Covered Calls Advisor Portfolio
Note: the price of Intel stock was $45.56 upon the options expiration.
02/20/2018 Continuation of Intel Covered Calls position by selling 4 Mar 16th, 2018 Call options at the $46.00 strike price @ $1.38 per share
Note: Intel stock was at $46.14 when this transaction occurred

A possible overall performance result (including commissions) for this Intel Covered Calls position is as follows:
Covered Calls Cost Basis: $18,880.95
= ($49.23 - $2.04) *400 + $4.95 commission

Net Profit Components:
(a) Options Income: +$1,357.69
= ($2.04 + $1.38) *400 shares - $10.31 commissions
(b) Dividend Income: +$120.00
= ($.30 dividend per share x 400 shares)

(c) Capital Appreciation (If INTC assigned at $46.00 strike price at Mar2018 options expiration): -$1,296.95
+($46.00 -$49.23)*400 shares - $4.95 commissions

Total Net Profit (If Intel assigned at $46.00 at March 16th, 2018 expiration): +$180.74

= (+$1,357.69 +$120.00 -$1,296.95)

Absolute Return (If Intel assigned at $46.00 at Mar 16th, 2018 expiration): +1.0%

= +$180.74/$18,880.95

Annualized Return: +7.6%

= (+$180.74/$18,880.95)*(365/46 days)