The Covered Calls Advisor Portfolio had seven Covered Call positions since the March 15th, 2019 monthly options expiration date. Six positions had expiration dates of April 18th and one expired on March 29th.
- Medtronic PLC was the position with the March 29th expiration. This Covered Call position was closed with the share price in-the-money, thus the shares were assigned (sold) at the strike price. The detailed results for this position were posted previously -- See link
- During the last hour of trading on the April 18th expiration date, three in-the-money positions [Alibaba Group Holding Ltd. (Position #1), Alphabet Inc., and Baidu Inc.) were rolled out to May 17th, 2019 Covered Call positions. The transactions-to-date for these positions are detailed in Section A below.
- Two Covered Call positions (Bristol Myers Inc. and UnitedHealth Care Inc.) closed out-of-the-money (stock price below the strike price) at the April 18th, 2019 options expiration. So, the Call options expired and the respective shares remain in the Covered Calls Advisor Portfolio. Decisions will be made soon to either sell the shares or to continue the Covered Calls positions by selling May 17th, 2019 Call options against the shares currently held. The detailed transactions will be posted on this blog site on the same day that these transactions occur.
- One Covered Call position (Boeing Inc.) closed in-the-money so
those shares were assigned (sold) at the strike price. The return-on-investment result for this Boeing position is detailed in Section B below. 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.
All 25 positions that have been
closed out so far in 2019 achieved a profit. The weighted average annualized return on investment for these 25 positions is +67.9%. As shown in the right sidebar, there are now five open
positions in the Covered Calls
Advisor Portfolio. All future transactions will continue to be posted on this site on the
same day they 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 -- Rolled Out Three Covered Call Positions -- (Alibaba, Alphabet Inc., and Baidu Inc.)
1. Alibaba (BABA) -- Continuing Covered Calls Position
The transactions were as follows:
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.
04/18/2019 Bought-to-Close 2 Apr 18th $170.00 Calls @ $16.79
04/18/2019 Sold-to-Open 2 May 17th, 2019 $175.00 Calls @ $14.45
Note: the price of BABA stock was $186.77 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 May 17th 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: -$2,821.50
= ($2.09 - $11.22 + $7.47 - $11.15 + $9.05 -$20.34 +$12.51 -$16.79 +$14.45) * 200 shares - $35.50 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If BABA stock is above $175.00 strike price at May 17th expiration): +$7,581.05
= ($175.00 -$137.07) * 200 shares - $4.95 commission
Total Net Profit: +$4,759.55
= (-$2,821.50 options income +$0.00 dividend income +$7,581.05 capital appreciation)
Absolute Return: +17.4%
= +$4,759.55/$27,414.00
Equivalent Annualized Return: +46.3%
= (+$4,759.55/$27,414.00)*(365/137 days)
2. Alphabet Inc. (GOOGL) -- Continuing Covered Call Position
The transactions have been as follows:
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.
04/18/2019 Bought-to-Close 1 Apr 18th $1,130.00 Calls @ $111.40
04/18/2019 Sold-to-Open 1 May 17th, 2019 $1,160.00 Calls @ $91.90
A possible overall performance result (including commissions) if this
in-the-money position is assigned at the May 17th 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: +$1,250.46
= (+$19.80 - $19.25 + $41.70 - $22.40 + $44.50 -$98.82 +$69.72 - $111.40 + $91.90) * 100 shares - $24.54 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If GOOGL stock is above $1,160.00 strike price at May 17th expiration): +$11,499.05
= ($1,160.00 -$1,044.96) * 100 shares - $4.95 commission
Total Net Profit: +$12,749.51
= (+$1,250.46 options income +$0.00 dividend income +$11,499.05 capital appreciation)
Absolute Return: +12.2%
= +$12,749.51/$104,496.00
Equivalent Annualized Return: +32.5%
= (+$12,749.51/$104,496.00)*(365/137 days)
3. Baidu Inc. (BIDU) -- Continuing Covered Call Position
The transactions are as follows:
03/20/2019 Bought 100 shares of BIDU @ $168.69
03/20/2019 Sold 1 BIDU April 18, 2019 $165.00 Call option @ $7.35
Note: this was a simultaneous Buy/Write transaction.
04/18/2019 Bought-to-Close 1 Apr 18th $165.00 Call @ $6.30
04/18/2019 Sold-to-Open 1 May 17th, 2019 $165.00 Call @ $10.70
Note: the price of BIDU stock was $171.24 when this roll out transaction occurred.
A possible overall performance result (including commissions) would be as follows:
Covered Call Cost Basis: $16,128.38
= ($168.69 - $7.35) * 100 shares + $5.62 commission
Net Profit:
(a) Options Income: +$1,169.38
= ($7.35 - $6.30 + $10.70) * 100 shares) - $5.62 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Baidu shares are above $165.00 strike price at May 17th expiration): -$373.95
= ($165.00 - $168.69) * 100 shares - $4.95 commission
Total Net Profit (If Baidu stock price is above $165.00 strike price at May 17th options expiration): +$795.43
= (+$1,169.38 options income +$0.00 dividend income -$373.95 capital appreciation)
Absolute Return (If Baidu stock price is above $165.00 strike price at April 18th options expiration): +4.9%
= +$795.43/$16,128.38
Equivalent Annualized Return: +30.5%
= (+$361.05/$16,128.38)*(365/59 days)
Section B -- Covered Calls Position in Boeing Inc. Assigned (Closed Out) at April 18th Options Expiration
Boeing Inc. -- Covered Call Position Closed
The buy/write transactions was:
03/13/2019 Bought 100 Boeing shares @ $375.72
03/13/2019 Sold 1 Boeing 04/18/2019 $350.00 Call option @ $35.47
Note: the Open Interest in the Apr 18th $350.00 Calls was sufficiently liquid at 641 contracts.
04/18/2019 1 Boeing Apr 18th, 2019 $350.00 Call option expired in-the-money, so 100 shares of BA stock sold at $350.00 strike price
The overall performance result (including commissions) for this Boeing Co. Covered Call position was as follows:
Covered Call Cost Basis: $34,030.62
= ($375.72 - $35.47) *100 + $5.62 commission
Net Profit Components:
(a) Options Income: +$3,547.00
= ($35.47*100 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (BA shares assigned at $350.00 strike price at April 18th options expiration): -$2,576.95
+($350.00-$375.72)*100 shares - $4.95 commissions
Total Net Profit (BA shares assigned at $350.00 at Apr 18th, 2019 expiration): +$970.05
= (+$3,547.00 option income +$0.00 dividend income -$2,576.95 capital appreciation)
Absolute Return: +2.9%
= +$970.05/$34,030.62
Annualized Return: +28.1%
= (+$970.05/$34,030.62)*(365/37 days)
