- Three positions were closed early (i.e. prior to the March 15th expiration date). The detailed results for each position were posted previously on the dates each position was closed:
- Marathon Petroleum Corp. -- Closed Early -- See link
- Delta Air Lines Inc. -- Early Assignment -- See link
- BlackRock Group L.P. -- Early Assignment -- See link
- On the March 15th expiration date, two core holdings [Alibaba Group Holding Ltd. (Position #1) and Alphabet Inc.) were rolled out to April 18th, 2019 Covered Call positions. The detailed transactions-to-date for these positions are provided in Section A below.
- The remaining four positions (Alibaba Group Holding Ltd. (Position #2), Applied Materials Inc., Fedex Corp., and Micron Technology Inc.) closed in-the-money at the March 15th, 2019 options expiration, so those shares were assigned (sold) at their respective strike prices. The return-on-investment results for these four positions are detailed in Section B below. The cash now available in the Covered Calls Advisor Portfolio from the closing of these four assigned positions will be retained until new Covered Calls and/or 100% Cash-Secured Puts positions are established.
All 23 positions that have been closed out so far in 2019 achieved a profit. As shown in the right sidebar, there are now four Covered Calls positions (all with April 18th, 2019 expirations) in the Covered Calls Advisor Portfolio. Any new position(s) established will be posted on this site on the same day the transactions occur. As always, please email me at the address shown in the right sidebar with any questions or comments related to this Covered Calls Advisor blog.
Section A -- Roll Out and Up Positions -- (Alibaba Position #1 and Alphabet Inc.)
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.
02/15/2019 Bought-to-Close 2 Feb 15th $155.00 Calls @ $11.15
02/15/2019 Sold-to-Open 2 Mar 15th, 2019 $160.00 Calls @ $9.05
Note: the price of BABA stock was $166.10 when this roll out and up transaction occurred.
03/15/2019 Bought-to-Close 2 Mar 15th $160.00 Calls @ $20.34
03/15/2019 Sold-to-Open 2 Apr 18th, 2019 $170.00 Calls @ $12.51
Note: the price of BABA stock was $180.29 when this roll out and up transaction occurred.
A possible overall performance result (including commissions) if this in-the-money position is assigned at the April 18th expiration is as follows:
Cost Basis: $27,414.00
= $137.07 per share value at end of December, 2018 * 200 shares
Net Profit Components:
(a) Options Income: -$2,347.21
= ($2.09 - $11.22 + $7.47 - $11.15 + $9.05 -$20.34 +$12.51) * 200 shares - $29.21 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If BABA stock is above $170.00 strike price at April 18th expiration): +$6,581.05
= ($170.00 -$137.07) * 200 shares - $4.95 commission
Total Net Profit: +$4,233.84
= (-$2,347.21 options income +$0.00 dividend income +$6,581.05 capital appreciation)
Absolute Return: +15.4%
= +$4,233.84/$27,414.00
Equivalent Annualized Return: +76.2%
= (+$4,233.84/$27,414.00)*(365/74 days)
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.
02/15/2019 Bought-to-Close 1 Feb 15th $1,095.00 Call @ $22.40
02/15/2019 Sold-to-Open 1 Mar 15th, 2019 $1,090.00 Call @ $44.50
Note: the price of GOOGL stock was $1,117.25 when this roll out and down transaction occurred.
03/15/2019 Bought-to-Close 1 Mar 15th $1,090.00 Call @ $98.82
03/15/2019 Sold-to-Open 1 April 18th, 2019 $1,130.00 Call @ $69.72
Note: the price of GOOGL stock was $1,188.50 when this roll out and up transaction occurred.
A possible overall performance result (including commissions) if this in-the-money position is assigned at the April 18th expiration is as follows:
Cost Basis: $104,496.00
= $1,044.96 per share value at end of December, 2018 * 100 shares
Net Profit Components:
(a) Options Income: +$3,506.08
= (+$19.80 - $19.25 + $41.70 - $22.40 + $44.50 -$98.82 +$69.72) * 100 shares - $18.92 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If GOOGL stock is above $1,130.00 strike price at April 18th expiration): +$8,499.05
= ($1,130.00 -$1,044.96) * 100 shares - $4.95 commission
Total Net Profit: +$12,005.13
= (+$3,506.08 options income +$0.00 dividend income +$8,499.05 capital appreciation)
Absolute Return: +11.5%
= +$12,005.13/$104,496.00
Equivalent Annualized Return: +56.7%
= (+$12,005.13/$104,496.00)*(365/74 days)
Section B -- Covered Calls Positions Assigned (Closed Out) at March 15th Options Expiration
1. Alibaba Group Holding Ltd. (Position #2) -- Covered Calls Position Closed
The transactions were:
1/1/2019 200 Alibaba (Position #2) shares market value was $137.07
1/7/2019 Sold 2 BABA February 15, 2019 $145.00 Call options @ $6.40
Note: Price of BABA shares was $140.94 today when these Call options were sold1/30/2019 Bought-to-Close 2 BABA Feb 15, 2019 $145.00 Call options @ $21.83
1/30/2019 Sold-to-Open 2 BABA March 15, 2019 $155.00 Call options @ $14.88
Note: this was a simultaneously executed roll-out-and-up transaction executed when BABA was at $166.19 per share.
03/15/2019 2 BABA Mar 15th, 2019 $155.00 Call options exercised, so 200 shares of BABA stock sold at $155.00 strike price
The overall performance result (including commissions) for this Alibaba Covered Calls position is as follows:
Covered Calls Cost Basis: $27,414.00
= $137.07 per share *200 shares
Net Profit Components:
(a) Option Income: -$116.29
= ($6.40 -$21.83 +$14.88) * 200 shares - $6.29 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (BABA shares above $155.00 strike price at Mar 15th expiration): +$3,581.05
= ($155.00 -$137.07) * 200 shares - $4.95 commission
Total Net Profit (BABA shares assigned at expiration): +$3,464.76
= (-$116.29 options income +$0.00 dividend income +$3,581.05 capital appreciation)
Absolute Return: +12.6%
= +$3,464.76/$27,414.00
Equivalent Annualized Return: +62.3%
= (+$3,464.76/$27,414.00)*(365/74 days)
2. Applied Materials Inc. (AMAT) -- Covered Calls Position Closed
The transactions were:02/15/2019 Bought 300 AMAT shares @ $39.12
02/15/2019 Sold 3 AMAT March 15, 2019 $37.00 Call options @ $2.54 per share
Note: a simultaneous buy/write transaction was executed.
02/20/2019 Quarterly ex-dividend of $.20 per share
03/15/2019 3 AMAT Mar 15th, 2019 $37.00 Call options exercised, so 300 shares of AMAT stock sold at $37.00 strike price
The overall performance result (including commissions) for this Applied Materials Covered Calls position are as follows:
Covered Calls Cost Basis: $10,978.95
= ($39.12 - $2.54) *300 shares + $4.95 commission
Net Profit Components:
(a) Options Income: +$759.99
= ($2.54*300 shares) - $2.01 commissions
(b) Dividend Income (AMAT assigned at Mar 15th, 2019 expiration): +$60.00
= ($.20 dividend per share x 300 shares)
(c) Capital Appreciation (AMAT shares assigned at $37.00 strike price at options expiration): -$640.95
+($37.00-$39.12)*300 shares - $4.95 commissions
+($37.00-$39.12)*300 shares - $4.95 commissions
= (+$759.99 options income +$60.00 dividend income -$640.95 capital appreciation)
Absolute Return: +1.6%
Absolute Return: +1.6%
= +$179.04/$10,978.95
Annualized Return: +20.5%
= (+$179.04/$10,978.95)*(365/29 days)
3. Fedex Corp. (FDX) -- Covered Call Position Closed
02/15/2019 Bought 100 Fedex shares @ $178.60
02/15/2019 Sold 1 FDX 3/15/2019 $170.00 Call option @ $10.44
Note: A simultaneous buy/write transaction was executed. The Open Interest in these Calls was 380 contracts and the Implied Volatility was 26.0 when this transaction was executed.
03/08/2019 Quarterly ex-dividend of $.65 per share
03/15/2019 1 FDX Mar 15th, 2019 $170.00 Call option exercised, so 100 shares of FDX stock sold at $170.00 strike price
The overall performance result (including commissions) for this Fedex Covered Call are as follows:
Covered Call Cost Basis: $16,820.95
= ($178.60 - $10.44) *100 shares + $4.95 commission
Net Profit Components:
(a) Options Income: +$1,043.33
= ($10.44*100 shares) - $.67 commissions
(b) Dividend Income (Fedex shares assigned at Mar 15th, 2018 expiration): +$65.00
= ($.65 dividend per share x 100 shares)
(c) Capital Appreciation (Fedex assigned at $170.00 strike price at options expiration): -$864.95
+($170.00-$178.60)*100 shares - $4.95 commissions
+($170.00-$178.60)*100 shares - $4.95 commissions
Total Net Profit (FDX shares assigned at $170.00 at March 15, 2019 expiration): +$243.38
= (+$1,043.33 options income +$65.00 dividend income -$864.95 capital appreciation)
Absolute Return: +1.4%
Absolute Return: +1.4%
= +$243.38/$16,820.95
Annualized Return: +18.2%
= (+$243.38/$16,820.95)*(365/29 days)
4. Micron Technology Inc. (MU) -- Covered Calls Position ClosedThe transactions were:
02/08/2019 Bought 500 shares MU @ $37.91
02/08/2019 Sold 5 MU March 15, 2019 $35.00 Call options @ $4.20
Note: this was a simultaneous Buy/Write transaction.
03/15/2019 5 MU Mar 15th, 2019 $35.00 Call options exercised, so 500 shares of MU stock sold at $35.00 strike price
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $16,863.33
= ($37.91 - $4.20) * 500 shares + $8.30 commission
Net Profit:
(a) Options Income: +$2,100.00
= ($4.20 * 500 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Micron Technology Inc. shares were above $35.00 strike price at March 15th expiration): -$1,459.95
= ($35.00-$37.91) * 500 shares - $4.95 commission
Total Net Profit (Micron stock price was above $35.00 strike price at March 15th options expiration): +$640.05
= (+$2,100.00 options income +$0.00 dividend income -$1,459.95 capital appreciation)
Absolute Return: +3.8%
= +$640.05/$16,863.33
Annualized Return: +38.5%
= (+$640.05/$16,863.33)*(365/36 days)
