March 19th, 2021 Monthly Options Expiration Results

The Covered Calls Advisor Portfolio had seventeen positions since last month's (February 19th, 2021) monthly options expiration date.  During this past month, the Covered Calls Advisor Portfolio closed out sixteen of these seventeen positions profitably, thus substantially outperforming the benchmark S&P 500 (SPY) ETF which had an absolute return-on-investment of -0.14% during the same time period.  

The results from these Covered Calls positions demonstrate three important concepts of Covered Calls investing:
1. Good stock selection is Job #1;
2. Thoughtful strike price and options expiration date selection are very important considerations when initiating a position; and
3. Daily active monitoring of positions is helpful for identifying position management opportunities (such as closing out a position or rolling a position) prior to its options expiration date.

 

The return-on-investment results for the sixteen closed positions during the past month are as follows:   

• Six positions expired in-the-money yesterday (on the March 19th, 2021 monthly options expiration date), so the options expired and the stocks were sold at their strike price.  The return-on-investment results were as follows:

1. D.R. Horton Inc. (DHI) Covered Calls -- +6.3% absolute return in 47 days (equivalent to +48.9% annualized return-on-investment).
2. Home Depot Inc. (HD) Covered Call -- +2.2% absolute return in 24 days (equivalent to +33.4% annualized return-on-investment).
3. iShares MSCI Emerging Markets ETF (EEM) 100% Cash-Secured Puts -- +0.8% absolute return in 10 days (equivalent to +30.7% annualized return-on-investment).
4. Micron Technology Inc. (MU) Covered Calls -- +7.8% absolute return in 52 days (equivalent to +54.5% annualized return-on-investment).
5. Regeneron Pharmaceuticals Inc. (REGN) 100% Cash-Secured Put -- +1.6% absolute return in 13 days (equivalent to +19.0% annualized return-on-investment); and
   
6. Uber Technologies Inc. (UBER) -- +1.6% absolute return in 18 days (equivalent to +32.3% annualized return-on-investment). 
   

 

• Four Covered Calls positions expired in-the-money on their weekly options expiration date and their results were:
  

1. Applied Materials Inc. (AMAT) -- +1.7% absolute return in 11 days (equivalent to +57.7% annualized return-on-investment).
2. Bank of America Corp. (BAC) -- +1.5% absolute return in 15 days (equivalent to +36.1% annualized return-on-investment).
3. Facebook Inc. (FB) -- +1.3% absolute return in 15 days (equivalent to +30.6% annualized return-on-investment).
4. Lennar Inc. (LEN) -- +4.8% absolute return in 52 days (equivalent to +33.5% annualized return-on-investment).

• Four Covered Calls were closed on the day prior to the ex-dividend date by Early Assignment.  The stocks were assigned (i.e. sold) at their strike prices with the following results:

1. Bank of America Corp. (BAC) -- +0.9% absolute return in 6 days (equivalent to +57.8% annualized return-on-investment).
   
2. Merck & Co. Inc. (MRK) -- +0.9% absolute return in 8 days (equivalent to +39.4% annualized return-on-investment).
3. Rio Tinto (RIO) -- +1.1% absolute return in 14 days (equivalent to +27.5% annualized return-on-investment).
4. Raytheon Technologies Inc. (RTX) -- +1.0% absolute return in 8 days (equivalent to +43.4% annualized return-on-investment).

• Two Covered Calls positions were unwound (closed out prior to their options expiration dates) to achieve a significantly greater annualized return-on-investment than would have occurred if it was instead assigned on their expiration date) with the following results:

1. GoHealth Inc. (GOCO) -- +17.8% absolute return in 182 days (equivalent to +35.7% annualized return-on-investment).
2. Pfizer Inc. (PFE) -- +0.3% absolute return in 38 days (equivalent to +2.8% annualized return-on-investment).

 

• One of the seventeen positions this month (in Alibaba Group Holdings Ltd.) expired out-of-the-money on the March 19th expiration date, so the 200 shares now remain in the Covered Calls Advisor Portfolio. A decision will be made early next week either sell these Alibaba shares or to continue with the Covered Calls position by selling future Call options against the shares currently held.

 

As shown in the right sidebar, there are currently four open positions in the Covered Calls Advisor Portfolio.  All future transactions and return-on-investment results for these positions will be posted on this blog site on the same day the transactions occur.  As always, I will be happy to receive and reply to your emails whenever you have any comments or questions related to Covered Calls investing.

Best Wishes,
Jeff
partlow@cox.net