- Two Covered Calls positions were assigned early (on the day prior to their ex-dividend dates) and were closed out at a profit prior to this month's July 19th options expiration date. The detailed results for both of these positions were provided on this blog on the same day they were closed: (1) Bristol-Myers Squibb Co. (BMY) -- See link; and (2) JPMorgan Chase & Co. (JPM) -- See link.
- Two Covered Calls positions (AerCap Holdings NV and Alibaba Group Holdings Ltd.) closed in-the-money on the July 19th options expiration date yesterday, so those shares were assigned (sold) at their respective strike prices. The details of these positions including their return-on-investment results are shown below.
- One Covered Call position in Bristol-Myers Squibb Co. closed out-of-the-money (stock price below the strike price) at the July 19th, 2019 options expiration. So, the two BMY Call options expired and the 200 shares remain in the Covered Calls Advisor Portfolio. A decision will be made soon to either sell the shares or to continue the Covered Calls position by selling August 16th, 2019 Call options against the shares currently held. Since there is an upcoming earnings report on July 25th, most likely the shares will be sold to avoid the uncertainty that accompanies quarterly earnings reports. Regardless, the transactions and return-on-investment results for this BMY position will be posted on this blog site on the same day the transactions occur.
1. AerCap Holdings NV (AER) -- Covered Calls Position Closed
The transactions were:
7/03/2019 Bought 200 shares of AerCap Holdings @ $50.56 per share
7/03/2019 Sold 2 AER July 19th, 2019 $50.00 Call options @ $1.30 per share
Note: This was a simultaneous buy/write transaction. Also, there is no earnings report prior to the options expiration date.
07/19/2019 The 2 AER July 19th $50.00 Call options closed in-the-money (with the $50.86 stock price above the $50.00 strike price), so 200 shares of AerCap stock sold at $50.00 strike price.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $9,858.29
= ($50.56 - $1.30)* 200 shares + $6.29 commissions
Net Profit Components:
(a) Options Income: +$260.00
= ($1.30 * 200 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$116.95
= ($50.00 -$50.56) * 200 shares - $4.95 commission
Potential Total Net Profit: +$143.05
= (+$260.00 options income +$0.00 dividend income -$116.95 capital appreciation)
Absolute Return: +1.5%
= +$143.05/$9,858.29
Equivalent Annualized Return: +31.2%
= (+$143.05/$9,858.29)*(365/17 days)
2. Alibaba Group Holding Ltd. (BABA) -- Covered Calls Position Closed
07/05/2019 Bought 200 shares of Alibaba stock @ $173.38 per share
07/05/2019 Sold 2 Alibaba July 19th, 2019 $167.50 Call options @ $7.43 per share
Note: this was a simultaneous Buy/Write transaction
07/19/2019 The 2 BABA July 19th $167.50 Call options closed in-the-money (the $172.99 stock price above the $167.50 strike price), so 200 shares of Alibaba stock sold at $167.50 strike price.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $33,196.29
= ($173.38 - $7.43) * 200 shares + $6.29 commission
Net Profit Components:
(a) Options Income: +$1,486.00
= ($7.43 * 200 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$1,180.95
= ($167.50 -$173.38) * 200 shares - $4.95 commission
Total Net Profit: +$305.05
= (+$1,486.00 options income +$0.00 dividend income -$1,180.95 capital appreciation)
Absolute Return: +0.9%
= +$305.05/$33,196.29
Equivalent Annualized Return: +22.4%
= (+$305.05/$33,196.29)*(365/15 days)
