Position Closed in Lowe's Companies Inc.

This morning, the Covered Calls Advisor decided to close the existing Lowe's Companies Inc. (ticker symbol LOW) Covered Calls position. This Lowe's holding was an August 16th, 2019 Covered Calls position that was not assigned at options expiration last Friday.  This morning, Lowe's stock recovered a portion of its recent declines in sympathy with the earnings beat reported this morning by Home Depot.  Lowe's reports their earnings tomorrow morning and the since I usually prefer not to hold stocks through earnings reports given the related volatility, the decision to close out the position was made.  The large cash position currently held in the Covered Calls Advisor Portfolio is invested in a Schwab money market fund yielding 2.0% and will remain there until new position(s) are established.  This current positioning is indicative of this Advisor's cautious outlook for the stock market for upcoming weeks.  As always, any new positions will be shared on this blog on the same day the transactions occur.       

As detailed below, the result was a -2.0% absolute return-on-investment (equivalent to -22.2% on an annualized basis) for the 33 days this position was held.


Lowe's Companies Inc. (LOW) -- Covered Calls Position Closed

The transactions were:
07/18/2019 Bought 200 Lowe's Companies Inc. shares @ $103.49
07/18/2019 Sold 2 Lowe's 8/16/2019 $100.00 Call options @ $4.31
Note: the Implied Volatility was 21.9 when this transaction was executed.
07/23/2019 Ex-dividend of $.55 per share
08/16/2019 Lowe's shares closed at $93.92 which was below the $100.00 strike price, so Call options expired and 200 shares of Lowe's stock were retained in the Covered Calls Advisor Portfolio
08/20/2019 Sold 200 shares of Lowe's stock at $96.66 to close out this position.

The overall performance results (including commissions) for this Lowe's Companies Inc. Covered Calls position are as follows:
Covered Calls Cost Basis: $19,842.29
= ($103.49 - $4.31) * 200 shares + $6.29 commissions

Net Profit Components:
(a) Options Income: +$862.00
= ($4.31 *200 shares)

(b) Dividend Income: +$110.00
= ($.55 dividend per share x 200 shares)

(c) Capital Appreciation: -$1,370.95
+($96.66 -$103.49)* 200 shares - $4.95 commissions

Total Net Profit: -$398.95

= (+$862.00 options income +$110.00 dividend income -$1,370.95 capital appreciation)

Absolute Return: -2.0%

= -$398.95/$19,842.29

Annualized Return: -22.2%

= (-$398.95/$19,842.29)*(365/33 days)