September 21, 2018 Options Expiration Results

The Covered Calls Advisor Portfolio had three Covered Calls positions with September 21st, 2018 options expirations:

• One Covered Calls position (Metlife Inc.) closed at the  monthly options expiration in-the-money (stock price above the options strike price), so those shares were assigned (sold) at the strike price. 

• Two positions (Alibaba Group and Lam Research Inc.) closed with their stock prices below the strike price, so the options expired and the long stock positions now remain in the Covered Calls Advisor Portfolio.  Within the next few days, these stocks will either be sold or next month Call options will be sold against the stock to re-establish Covered Calls positions.  As always, all transactions will be posted on this blog on the same day they occur. 

The return-on-investment result for the completed Metlife position was +4.5% absolute return (+13.7% annualized return) over the 119 days investment period.

The cash now available in the Covered Calls Advisor Portfolio from the closing of this position 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.  

So far in 2018, thirty-eight of forty-one (92.7%) positions were closed at a profit.  This far exceeds the Covered Calls Advisor's overall long-term goal of having at least two-thirds (67%) of positions closed out at a profit.  None of the remaining three positions (Alibaba Group, Lam Research Inc., and U.S. Steel Corp.) have yet to be closed out, but instead are currently held as open long stock positions in the Covered Calls Advisor Portfolio.  For the thirty-eight positions closed out so far in 2018, the average annualized return-on-investment is +28.8%.  

The details for the Metlife Inc. position are as follows:

Metlife Inc. (MET) -- Covered Calls Position Closed

The transactions details have been as follows:
05/25/2018 Bought 500 MET shares @ $47.63
05/25/2018 Sold 5 MET June 15, 2018 $47.50 Call options @ $.99
Note: a simultaneous buy/write transaction was executed.
06/15/2018 5 MET 6/15/2018 $47.50 Call options expired with stock price below the strike price
08/03/2018 Ex-dividend of $.42 per share
08/06/2018 Sold 5 MET 8/17/2018 $46.50 Call options @ $.33
08/17/2018 5 MET 8/17/2018 $46.50 Call options expired
Note: the price of MET stock was $45.94 upon options expiration
08/20/2018 Sold 5 MET 9/21/2018 $47.50 Call options @ $.52
Note: the price of MET stock was $46.37 when these Calls were sold
09/21/2018  MET stock closed above the $47.50 strike price, so 5 Call options expired and 500 shares were sold at $47.50

The overall performance result (including commissions) for this MET Covered Calls position is as follows:
Stock Purchase Cost Basis: $23,328.30
= ($47.63 -$.99) *500 shares +$8.30 commission

Net Profit:
(a) Options Income: +$903.40
= ($.99 +$.33 +$.52) *500 shares - $16.60 commissions
(b) Dividend Income: +$210.00
= $.42 per share x 500 shares

(c) Capital Appreciation: -$69.95
=+($47.50-$47.63)*500 - $4.95 commission

Total Net Profit: +$1,043.45

= (+$903.40 +$210.00 -$69.95)

Absolute Return: +4.5%

= +$1,043.45/$23,328.30

Annualized Return: +13.7%

= (+$1,043.45/$23,328.30)*(365/119 days)