Details as well as some potential overall return-on-investment results for each position are:
1. Sinclair Broadcast Group Inc. (SBGI) -- Continuation of Covered Calls Position
03/07/2018 Bought 400 shares of Sinclair stock @ $33.40 per share
03/07/2018 Sold 4 Sinclair March 16th, 2018 $33.00 Call options @ $1.00 per share
Note: this was a simultaneous Buy/Write transaction
03/08/2018 Ex-dividend of $72.00 ($.18 per share x 400 shares)
03/15/2018 4 March 16th Call options expired
03/27/2018 Sold 4 Sinclair April 20th, 2018 $32.00 Call options @ $1.45 per share
04/20/2018 4 Sinclair April 20th Call options expired
05/09/2018 Sold 4 Sinclair May 18th, 2018 $30.00 Call options @ $.52 per share
A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $12,967.63
= ($33.40 - $1.00)* 400 shares + $7.63 commission
Net Profit Components:
(a) Options Income: +$1,188.00
= ($1.00 + $1.45 + $.52) * 400 shares
(b) Dividend Income: +$72.00
= $.18 per share * 400 shares
(c) Capital Appreciation (If SBGI is above $30.00 strike price at May 18th expiration): -$1,364.95
= ($30.00 -$33.40)* 400 shares - $4.95 commission
Potential Total Net Profit (If assigned at expiration): -$104.95
= (+$1,188.00 options income +$72.00 dividend income -$1,364.95 capital appreciation)
Absolute Return: -0.8%
= -$104.95/$12,967.63
Equivalent Annualized Return: -4.0%
= (-$104.95/$12,967.63)*(365/73 days)
2. United States Steel Corp. (X) -- Continuation of Covered Calls Position
02/01/2018 Bought 400 shares of U.S. Steel stock @ $36.72 per share
02/01/2018 Sold 4 U.S. Steel Mar 16th, 2018 $36.00 Call options @ $2.62 per share
Note: this was a simultaneous Buy/Write transaction
02/08/2018 $20.00 = ($.05 per share ex-dividend x 400 shares)
03/13/2018 Bought-to-Close 4 Mar 16th $36.00 Call options @ $5.99
03/13/2018 Sold-to-Open 4 Apr 20th $40.00 Call options @ $3.57
Note: this Calls debit spread transaction occurred when the stock was at $41.88
04/20/2018 4 U.S. Steel April 20th Call options expired
05/10/2018 Sold 4 U.S. Steel June 15th, 2018 $40.00 Call options @ $.66 per share
Note: the price of U.S. Steel stock was $36.04 when these Calls were sold
Two possible overall performance results (including commissions) would be as follows:
Covered Calls Cost Basis: $13,647.63
= ($36.72 - $2.62)* 400 shares + $7.63 commission
Net Profit Components:
(a) Options Income: +$335.97
= ($2.62 - $5.99 + $3.57 + $.66) * 400 shares - $8.03 commissions
(b) Dividend Income: +$20.00
= $.05 per share * 400 shares
(c) Capital Appreciation (If price of X stock is unchanged at $36.04 at June 15th expiration): -$276.95
= ($36.04 -$36.72)* 400 shares - $4.95 commission; OR
(c) Capital Appreciation (If X is above $40.00 strike price at June 15th expiration):
+$1,307.05
= ($40.00 -$36.72)* 400 shares - $4.95 commission
1. Potential Total Net Profit (If stock price unchanged at expiration): +$79.02
= (+$335.97 options income +$20.00 dividend income -$276.95 capital appreciation); OR
2. Potential Total Net Profit (If assigned at expiration): +$1,663.02
= (+$335.97 options income +$20.00 dividend income +$1,307.05 capital appreciation)
1. Absolute Return (If stock price unchanged at expiration): +0.6%
= +$79.02/$13,647.63
Equivalent Annualized Return: +1.6%
= (+$79.02/$13,647.63)*(365/134 days); OR
2. Absolute Return (If assigned at expiration): +12.2%
= +$1,663.02/$13,647.63
Equivalent Annualized Return: +33.2%
= (+$1,663.02/$13,647.63)*(365/134 days)
