March 16th 2018 Options Expiration Results

The Covered Calls Advisor Portfolio had twelve positions with March 16th 2018 options expirations:

• Eight positions [Alibaba Group Holding Ltd. (2 positions), Bank of America Corp., Caterpillar Inc., Intel Corporation, Lam Research Corp., Marathon Petroleum Corp., and Synchrony Financial] closed in-the-money, so the maximum possible return-on-investment result was achieved for each of these positions.
• Three positions (Blackstone Group LP, Delta Air Lines Inc., and Sinclair Broadcast Group Inc.) closed yesterday with their stock price below their strike prices, so those shares will remain in the Covered Calls Advisor Portfolio (see current holdings in right sidebar) until either the stock is sold or continuation Covered Calls positions are established.  
• One position in Rio Tinto PLC had an early assignment (on the day prior to the ex-dividend date) and the +15.5% annualized return-on-investment result from this position was posted on this blog site on March 1st (the same day it occurred).

So nine of the twelve positions (75%) were assigned and thus achieved the maximum return-on-investment results.  This result exceeds the Covered Calls Advisor's overall long-term goal of having at least 67% of positions assigned at a profit.  So far in 2018, eighteen of twenty-one positions (85.7%) were assigned profitably and the remaining three positions are the Blackstone, Delta, and Sinclair positions from yesterday's close that currently remain as open positions.   

For the eight positions assigned at yesterday's March 16th expiration, the average annualized return-on-investment was +28.0%.  The results for each position was:

• Alibaba Group Holding Ltd. (Position #1):  +2.9%% absolute return (+24.4% annualized return) in 43 days
• Alibaba Group Holding Ltd. (Position #2):  +3.4%% absolute return (+32.2% annualized return) in 39 days 
• Bank of America Corp.:  +2.3% absolute return (+22.2% annualized return) in 38 days
• Caterpillar Inc.:  +4.4% absolute return (+34.4% annualized return) in 47 days
• Intel Corp.:  +1.0% absolute return (+7.6% annualized return) in 46 days  
• Lam Research Corp.:  +3.9% absolute return (+44.9% annualized return) in 32 days
• Marathon Petroleum Corp.:  +3.6% absolute return (+29.5% annualized return) in 45 days
• Synchrony Financial:  +2.9% absolute return (+29.0% annualized return) in 36 days

The cash now available in the Covered Calls Advisor Portfolio from the closing of these eight positions will be retained until new Covered Calls and/or 100% Cash-Secured Puts positions are established.  Any new position(s) established with this available cash will be posted on this site on the same day the transactions occur.  

To demonstrate how return-on-investment results for a closed Covered Calls position are calculated, the details for one of the eight assigned positions is provided here:

Alibaba Group Holding Ltd. (BABA Position #1) -- Covered Calls Position Closed

The transactions were as follows:
02/02/2018 Bought 300 shares of Alibaba stock @ $187.30 per share 
02/02/2018 Sold 3 Alibaba March 16th, 2018 $180.00 Call options @ $12.35 per share
Note: this was a simultaneous Buy/Write transaction
03/16/2018 3 BABA Mar 16th, 2018 $180.00 Call options expired in-the-money, so 300 shares of BABA owned were sold at the $180.00 strike price, thus closing out this Covered Calls position.

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $52,554.60
= ($187.30 - $12.35)* 300 shares + $6.96 commission

Net Profit Components:
(a) Options Income: +$3,705.00
= ($12.35* 300 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If BABA stock is above $180.00 strike price at March 16th expiration): -$2,194.95
= ($180.00 -$187.30)* 300 shares - $4.95 commission

Total Net Profit: +$1,510.05
= (+$3,705.00 options income +$0.00 dividend income -$2,194.95 capital appreciation)

Absolute Return: +2.9%
= +$1,510.05/$52,554.60
Equivalent Annualized Return: +24.4%
= (+$1,510.05/$52,554.60)*(365/43 days)