September 20th, 2019 Monthly Options Expiration Results

The Covered Calls Advisor Portfolio had six positions since the August 16th, 2019 monthly options expiration date.  One position (Lowe's Companies Inc.) was closed out early at a loss, three positions (Occidental Petroleum Corp., Valero Energy Group, and Wells Fargo Bank N.A.) were closed out early at a profit, one position (Alibaba Group Holdings Ltd.) was closed out at expiration at a profit, and one position (CommScope Holdings Co. Inc.) closed out-of-the-money (stock price below the strike price) at the September 20th, 2019 options expiration.  Therefore, the CommScope options expired and the shares owned remain in the Covered Calls Advisor Portfolio (as shown in the right sidebar).  A decision will be made soon to either sell the shares or to continue with Covered Calls positions by selling Call options against the shares currently held.  As always, the transactions and return-on-investment results for this position will be posted on this blog site on the same day the transactions occur.

• One Covered Calls position in Lowe's was closed out early on August 20th to avoid the uncertainty associated with the earnings report that was released the following day.  This position was closed at a loss -- see link
• One Covered Calls position in Occidental Petroleum was assigned early (on the last business day prior to the September 9th ex-dividend date) and was closed out at a profit -- see link for details.
• Two Covered Calls positions (Valero Energy and Wells Fargo) were closed out prior to the September 20th monthly options expiration date.  Both positions were closed at a profit -- see link for details.
• One Covered Calls position (Alibaba) closed in-the-money on the September 20th options expiration date yesterday, so these 400 shares were assigned (sold) at the $160.00 strike price.  The details of this closed position are shown below.
• One remaining open position in CommScope will be included in this calendar year 2019 results tracking when this position is closed out.

The Covered Calls Advisor's objective is to outperform the S&P 500 benchmark and to make profitable trades on at least two-thirds of positions established.  So far in calendar year 2019, 43 positions that have been closed out at a profit and only one was closed out at a loss.  The weighted average annualized return on investment for these 44 completed positions is +40.2%, which compares very favorably to the +26.9% year-to-date annualized roi for the S&P 500. 


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

The transactions were as follows:
08/23/2019 Bought 400 shares of Alibaba stock @ $164.67 per share 
08/23/2019 Sold 4 Alibaba September 20th, 2019 $160.00 Call options @ $9.30 per share
Note: this was a simultaneous Buy/Write transaction.
09/20/2019 Four BABA Call options expired in-the-money so 400 Alibaba shares sold at $160.00 strike price.
Note: the share price closed well in-the-money at $182.51

The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $62,155.63
= ($164.67 - $9.30) * 400 shares + $7.63 commission

Net Profit Components:
(a) Options Income: +$3,720.00
= ($9.30 * 400 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (BABA stock closed above $160.00 strike price at September 20th expiration): -$1,872.95
= ($160.00 -$164.67) * 400 shares - $4.95 commission

Total Net Profit: +$1,847.05
= (+$3,720.00 options income +$0.00 dividend income -$1,872.95 capital appreciation)

Absolute Return: +3.0%
= +$1,847.05/$62,155.63
Equivalent Annualized Return: +37.4%
= (+$1,847.05/$62,155.63)*(365/29 days)