June 21st, 2019 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions with June 21st, 2019 options expirations (Alibaba Group Holding and Goldman Sachs Inc).  Both positions were in-the-money at expiration and thereby achieved their maximum potential return-on-investment result, which was:

• Alibaba Group Holding Ltd. (BABA) -- +2.6% absolute return (equivalent to +28.5% annualized) for the 33 days of this investment; and
• Goldman Sachs Inc. (GS) -- +1.7% absolute return (equivalent to +20.1% annualized) for the 31 days of this investment.  

So far in 2019, all 32 positions were closed out at a profit.  The weighted average annualized return on investment for these 32 positions is +42.8%.  This compares to a year-to-date annualized return on investment of 37.2% for the benchmark S&P 500 index.

There are now no open positions in the Covered Calls Advisor Portfolio.  The cash (held in money market account at 2.3% yield) now available in the Covered Calls Advisor Portfolio from the closing of these position will be retained until new Covered Calls and/or 100% Cash-Secured Puts positions are established.  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.

The detailed transactions and results for these two positions were as follows:

1. Alibaba Group Holding Ltd. (BABA) -- Covered Calls Position
Closed

The transactions were as follows:
05/20/2019 Bought 200 shares of Alibaba stock @ $161.53 per share 
05/20/2019 Sold 2 Alibaba June 21st, 2019 $155.00 Call options @ $10.45 per share
Note: this was a simultaneous Buy/Write transaction
06/21/2019 Two Alibaba Group Holding Ltd. June 21st, 2019 $155.00 Call options expired in-the-money, so 200 shares of BABA stock sold at $155.00 strike price
Note: the price of BABA stock was $167.42 at the June 21st options expiration


The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $30,222.29
= ($161.53 - $10.45) * 200 shares + $6.29 commission

Net Profit Components:
(a) Options Income: +$2,090.00
= ($10.45* 200 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (BABA stock was above $155.00 strike price at June 21st expiration): -$1,310.95
= ($155.00 -$161.53) * 200 shares - $4.95 commission

Total Net Profit: +$779.05
= (+$2,090.00 options income +$0.00 dividend income -$1,310.95 capital appreciation)

Absolute Return: +2.6%
= +$779.05/$30,222.29
Equivalent Annualized Return: +28.5%
= (+$779.05/$30,222.29)*(365/33 days)


2. Goldman Sachs Group Inc. (GS) -- Covered Calls Position Closed
The transactions were:
05/22/2019 Bought 200 GS shares @ $196.54
05/22/2019 Sold 2 GS June 21, 2019 $190.00 Call options @ $8.92
Note: a simultaneous buy/write transaction was executed.
05/29/2019 Upcoming quarterly ex-dividend of $.85 per share
06/21/2019 Two GS June 21st, 2019 $190.00 Call options expired in-the-money, so 200 shares of GS stock sold at $190.00 strike price
Note: the price of GS stock was $195.98 at the 6/21/2019 options expiration


The overall performance result (including commissions) for this GS Covered Calls position was as follows:
Covered Calls Cost Basis: $37,528.95
= ($196.54 - $8.92) * 200 shares +$4.95 commission

Net Profit:
(a) Options Income: +$1,782.66
= ($8.92 *200 shares) - $1.34 commissions
(b) Dividend Income (GS assigned at June 21st, 2019 expiration): +$170.00
= ($.85 dividend per share x 200 shares)

(c) Capital Appreciation (GS shares assigned at expiration): -$1,312.95
+($190.00 - $196.54) * 200 shares - $4.95 commissions

Total Net Profit: +$639.71

= (+$1,782.66 +$170.00 -$1,312.95)

Absolute Return: +1.7%

= +$639.71/$37,528.95

Annualized Return: +20.1%

= (+$639.71/$37,528.95)*(365/31 days)