- Seven positions (Anadarko Petroleum Corp., Bank of America Corp., Commercial Metals Co., Fluor Corp., JPMorgan Chase & Co. (2 positions), and Occidental Petroleum Corp.) closed in-the-money at the January 18th, 2019 options expiration, so those shares were assigned (sold) at their respective strike prices.
- One position with a Jan 18th expiration (Caterpillar Inc.) was assigned early. The results of this position were posted previously here.
- One position (U.S. Steel) was slightly out-of-the-money and the position was closed during market trading on the Jan 18th options expiration date.
- Two positions (Alibaba Group Holding and Alphabet Inc.) were rolled out from Jan 18th expirations to Feb 15th expirations.
Just as for calendar year 2018 (link), overall return-on-investment (roi) results will be determined for calendar year 2019 (Jan 1st through Dec 31st). The roi calculations for each of the nine closed positions so far this year are detailed below. A summary of roi results for these nine closed positions is as follows:
- Anadarko Petroleum Corp.: +10.9% absolute return (+220.2% annualized return) in 18 days
- Bank of America Corp.: +7.3% absolute return (+148.4% annualized return) in 18 days
- Caterpillar Inc.: +2.3% absolute return (+46.2% annualized return) in 18 days
- Commercial Metals Co.: +1.8% absolute return (+64.7% annualized return) in 10 days
- Fluor Corp.: +10.5% absolute return (+213.7% annualized return) in 18 days
- JPMorgan Chase & Co. position #1: +5.0% absolute return (+101.3% annualized return) in 18 days
- JPMorgan Chase & Co. position #2: +4.9% absolute return (+99.7% annualized return) in 18 days
- Occidental Petrolem Corp.: +7.6% absolute return (+153.2% annualized return) in 18 days
- U.S. Steel Corp.: +18.0% absolute return (+365.6% annualized return) in 18 days
The remaining two positions (Alibaba Position #1 and Alphabet Inc.) were in-the-money yesterday. Since these are core positions in the Covered Calls Advisor Portfolio, both positions were continued by rolling them out and up ("out" to the Feb 15th expiration date and "up" to a higher strike price) during the final hour of trading yesterday. These transactions were done close to market close to squeeze out almost all of the time value remaining in their January 18th Call options prior to continuing these positions by rolling out to the February 15th options expirations. These two positions are included in the current Covered Calls Advisor Portfolio shown in the right sidebar of this blog along with the six other February 15th, 2019 Covered Calls positions (Alibaba Group Holding position #2, Blackstone Group L.P., CVS Health Corp. position #1, CVS Health Corp. position #2, Lam Research Corp., and Lowes Companies Inc.) currently held in the Covered Calls Advisor Portfolio. The details for these two positions year-to-date are:
1. Alibaba Position #1 (BABA) -- Continuing Covered Calls Position
01/01/2019 200 BABA shares owned at $137.07 per share
01/07/2019 2 Jan 18, 2019 $145.00 short Call options sold at $2.09 per share
01/18/2019 Bought-to-Close 2 Jan 18th $145.00 Calls @ $11.22
01/18/2019 Sold-to-Open 2 Feb 15th, 2019 $155.00 Calls @ $7.47
Note: the price of BABA stock was $156.24 when this roll out and up transaction occurred.
01/01/2019 100 GOOGL shares owned at $1,044.96 per share
01/01/2019 1 Jan 18th, 2019 $1,085.00 short Call option valued at $19.80 per share
01/18/2019 Bought-to-Close 1 Jan 18th $1,085.00 Call option @ $19.25
01/18/2019 Sold-to-Open 1 Feb 15th, 2019 $1,095.00 Call @ $41.70
Note: the price of GOOGL stock was $1,104.73 when this roll out and up transaction occurred.
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The detailed transactions and results for the nine 2019 year-to-date closed positions are as follows:
1. Anadarko Petroleum Corp. (APC) -- Covered Calls Position Closed
01/01/2019 300 APC shares owned at $43.84 per share
01/07/2019 Sold 3 APC Jan 18, 2019 $47.50 Call options at $1.14 per share
01/18/2019 3 APC Call options closed in-the-money and stock assigned (i.e. sold) at $47.50 strike price
Note: Closing price of APC stock was $48.67 upon Jan 18th options expiration.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $13,152.00
= $43.84 * 300 shares
Net Profit Components:
(a) Option Income: +$335.04
= ($1.14 * 300 shares) - $6.96 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (APC was above $47.50 strike price at Jan 18th expiration): +$1,093.05
= ($47.50 -$43.84) * 300 shares - $4.95 commission
Total Net Profit (APC shares assigned at expiration): +$1,428.09
= (+$335.04 options income +$0.00 dividend income +$1,093.05 capital appreciation)
Absolute Return: +10.9%
= +$1,428.09/$13,152.00
Equivalent Annualized Return: +220.2%
= (+$1,428.09/$13,152.00)*(365/18 days)
2. Bank of America Corp. (BAC) -- Covered Calls Position Closed
01/01/2019 1,000 BAC shares owned at $24.64 per share
01/04/2019 Sold 10 BAC Jan 18, 2019 $26.00 Call options at $0.46 per share
Note: price of BAC shares was $25.51 when these Call options were sold
01/18/2019 10 BAC Call options closed in-the-money and stock assigned (i.e. sold) at $26.00 strike price
Note: Closing price of BAC stock was $29.30 upon Jan 18th options expiration.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $24,640.00
= $24.64 * 1,000 shares
Net Profit Components:
(a) Option Income: +$448.35
= ($.46 * 1,000 shares) - $11.65 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (BAC was above $26.00 strike price at Jan 18th expiration): +$1,355.05
= ($26.00 -$24.64) * 1,000 shares - $4.95 commission
Total Net Profit (BAC shares assigned at expiration): +$1,803.40
= (+$448.35 options income +$0.00 dividend income +$1,355.05 capital appreciation)
Absolute Return: +7.3%
= +$1,803.40/$24,640.00
Equivalent Annualized Return: +148.4%
= (+$1,428.09/$12,810.00)*(365/18 days)
3. Caterpillar Inc. (CAT) -- Covered Calls Position Closed by Early Assignment
01/01/2019 100 CAT shares owned at $127.07 per share
01/01/2019 Owned 1 short CAT Jan 18, 2019 $115.00 Call option at $14.68 per share
01/18/2019 1 CAT Call option exercised early so stock assigned (i.e. sold) at $115.00 strike price
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $11,239.00
= ($127.07 - $14.68) * 100 shares
Net Profit Components:
(a) Option Income: +$1,468.00
= ($14.68 * 100 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (APC was above $47.50 strike price at Jan 18th expiration): -$1,211.95
= ($115.00 -$127.07) * 100 shares - $4.95 commission
Total Net Profit: +$256.05
= (+$1,468.00 options income +$0.00 dividend income -$1,211.95 capital appreciation)
Absolute Return: +2.3%
= +$256.05/$11,239.00
Equivalent Annualized Return: +46.2%
= (+$256.05/$11,239.00)*(365/18 days)
4. Commercial Metals Co. (CMC) -- Covered Calls Position Closed
01/09/2019 Bought 300 shares of Commercial Metals Co. stock @ $15.83 per share
01/09/2019 Sold 3 CMC Jan 18th, 2019 $15.00 Call options @ $.99 per share
01/14/2019 Ex-dividend of $36.00 ($.12 per share x 300 shares)
01/18/2019 2 CMC Call options closed in-the-money and stock assigned (i.e. sold) at $15.00 strike price
Note: Closing price of CMC stock was $17.00 upon Jan 18th options expiration.
The overall performance result (including commissions) was:
Covered Calls Cost Basis: $4,458.96
= ($15.83 - $.99)* 300 shares + $6.96 commissions
Net Profit Components:
(a) Options Income: +$297.00
= ($.99* 300 shares)
(b) Dividend Income: +$36.00
= $.12 per share * 300 shares
(c) Capital Appreciation (Commercial Metals Co. stock was above $15.00 strike price at Jan 18th expiration): -$253.95
= ($15.00 -$15.83)* 300 shares - $4.95 commission
Total Net Profit (CMC stock assigned at expiration): +$79.05
= (+$297.00 options income +$36.00 dividend income -$253.95 capital appreciation)
Absolute Return: +1.8%
= +$79.05/$4,458.96
Equivalent Annualized Return: +64.7%
= (+$79.05/$4,458.96)*(365/10 days)
5. Fluor Corp. (FLR) -- Covered Calls Position Closed
01/01/2019 200 FLR shares owned at $32.20 per share
01/04/2019 Sold 2 FLR Jan 18, 2019 $35.00 Call options at $0.65 per share
Note: price of FLR shares was $33.96 when these Call options were sold
01/18/2019 2 FLR Call options closed in-the-money and stock assigned (i.e. sold) at $35.00 strike price
Note: Closing price of FLR stock was $38.53 upon Jan 18th options expiration.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $6,440.00
= $32.20 * 200 shares
Net Profit Components:
(a) Option Income: +$123.71
= ($.65 * 200 shares) - $6.29 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (FLR was above $35.00 strike price at Jan 18th expiration): +$555.05
= ($35.00 -$32.20) * 200 shares - $4.95 commission
Total Net Profit (If assigned at expiration): +$678.76
= (+$123.71 options income +$0.00 dividend income +$555.05 capital appreciation)
Absolute Return: +10.5%
= +$678.76/$6,440.00
Equivalent Annualized Return: +213.7%
= (+$678.76/$6,440.00)*(365/18 days)
6. JPMorgan Chase & Co. (JPM) Position #1 -- Covered Calls Position Closed
01/01/2019 200 JPM shares owned at $97.62 per share
01/04/2019 Sold 2 JPM Jan 18, 2019 $100.00 Call options at $2.52 per share
Note: price of JPM stock was $100.08 when Call options were sold
01/18/2019 2 JPM Call options exercised early so stock assigned (i.e. sold) at $100.00 strike price
Note: price of JPM stock was $104.59 at Jan 18th options expiration
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $19,524.00
= $97.62 * 200 shares
Net Profit Components:
(a) Option Income: +$504.00
= ($2.52 * 200 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (JPM was above $100.00 strike price at Jan 18th expiration): +$471.05
= ($100.00 -$97.62) * 200 shares - $4.95 commission
Total Net Profit: +$975.05
= (+$504.00 options income +$0.00 dividend income +$471.05 capital appreciation)
Absolute Return: +5.0%
= +$975.05/$19,524.00
Equivalent Annualized Return: +101.3%
= (+$975.05/$19,524.00)*(365/18 days)
7. JPMorgan Chase & Co. (JPM) Position #2 (JPM) -- Covered Calls Position Closed
01/01/2019 300 JPM shares owned at $97.62 per share
01/01/2019 Owned 3 short JPM Jan 18, 2019 $100.00 Call options at $1.58 per share
01/03/2019 Ex-dividend of $240.00 ($.80 per share x 300 shares)
01/18/2019 3 JPM Call options closed in-the-money and stock assigned (i.e. sold) at $100.00 strike price
Note: Closing price of JPM stock was $104.59 upon Jan 18th options expiration.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $28,812.00
= (97.62 - $1.58) * 300 shares
Net Profit Components:
(a) Option Income: +$467.04
= ($1.58 * 300 shares) - $6.96 commissions
(b) Dividend Income: +$240.00 ex-dividend = $.80 per share x 300 shares
(c) Capital Appreciation (JPM was above $100.00 strike price at Jan 18th expiration): +$709.05
= ($100.00 -$97.62) * 300 shares - $4.95 commission
Total Net Profit (300 JPM shares assigned at expiration): +$1,416.09
= (+$467.04 options income +$240.00 dividend income +$709.05 capital appreciation)
Absolute Return: +4.9%
= +$1,416.09/$28,812.00
Equivalent Annualized Return: +99.7%
= (+$1,428.09/$13,152.00)*(365/18 days)
8. Occidental Petroleum Corp. (OXY) -- Covered Calls Position Closed
01/01/2019 200 OXY shares owned at $61.38 per share
01/01/2019 Owned 2 short OXY Jan 18, 2019 $65.00 Call options at $0.97 per share
01/18/2019 2 OXY Call options closed in-the-money and stock assigned (i.e. sold) at $65.00 strike price
Note: Closing price of OXY stock was $67.03 upon Jan 18th options expiration.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $12,082.00
= ($61.38 - $.97) * 200 shares
Net Profit Components:
(a) Option Income: +$194.00
= ($.97 * 200 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (OXY was above $65.00 strike price at Jan 18th expiration): +$719.05
= ($65.00 -$61.38) * 200 shares - $4.95 commission
Total Net Profit (OXY shares assigned at expiration): +$913.05
= (+$194.00 options income +$0.00 dividend income +$719.05 capital appreciation)
Absolute Return: +7.6%
= +$913.05/$12,082.00
Equivalent Annualized Return: +153.2%
= (+$913.05/$12,082.00)*(365/18 days)
9. U.S. Steel Corp. (X) -- Covered Calls Position Closed
01/01/2019 400 X shares owned at $18.24 per share
01/04/2019 Sold 4 X Jan 18, 2019 $22.00 Call option at $.22 per share
Note: price of U.S. Steel stock was $20.29 when Calls were sold
01/18/2019 Bought-to-Close 4 X Jan 18th $22.00 Call options @ $.03 per share
01/18/2019 Sold 400 U.S. Steel shares @ $21.37
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $7,296.00
= $18.24 * 400 shares
Net Profit Components:
(a) Option Income: +$68.37
= ($.22 - $.03) * 400 shares - $7.63 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$1,247.05
= ($21.37 -$18.24) * 400 shares - $4.95 commission
Total Net Profit: +$1,315.42
= (+$68.37 options income +$0.00 dividend income +$1,247.05 capital appreciation)
Absolute Return: +18.0%
= +$1,315.42/$7,296.00
Equivalent Annualized Return: +365.6%
= (+$1,315.42/$7,296.00)*(365/18 days)
