- ConocoPhillips (COP) -- +1.9% absolute return (equivalent to +44.1% annualized return-on-investment) for the 16 days of this investment
- Lowe's Companies Inc. (LOW) -- +1.6% absolute return (equivalent to +25.5% annualized roi) for the 23 days of this investment
- Micron Technologies Inc. (MU) -- +3.8% absolute return (equivalent to +32.8% annualized roi) for the 42 days of this investment
The Covered Calls position in Caterpillar Inc. at the $210.00 strike price closed out-of-the money at $206.75, so the Call options expired and 100 shares of Caterpillar stock now remains in the Covered Calls Advisor Portfolio. This position is currently at a net loss and a decision to either close out the position by selling the 100 shares or by continuing the Covered Call position by selling another Call option will be made early next week.
The cash now available from the assignment (i.e. closing) of the two in-the-money positions will be retained until new Covered Calls and/or 100% Cash-Secured Puts positions are established. Given the Covered Calls Advisor's currently cautious Overall Market outlook, new positions will be hedged by continuing to establish Covered Calls (or their synthetically equivalent Cash-Secured Puts) at strike prices below the stock prices.
The detailed transactions and results for these three closed positions are as follows:
1. ConocoPhillips (COP) -- Covered Calls Position Closed at Options Expiration
The transactions were:
07/15/2021 Bought 200 ConocoPhillips shares @ $57.54
07/15/2021 Sold 2 COP 7/30/2021 $56.00 Call options @ $2.18
Note: A simultaneous buy/write transaction was executed. The Implied Volatility of the Call options was 28.1 when this Covered Calls position was established.
07/23/2021 Quarterly ex-dividend of $.43 per share
07/30/2021 Covered Calls position closed out -- two COP Call options expired in-the-money, so 200 shares were sold at the $56.00 strike price. Note: the stock price was just barely in-the-money at $56.06 per share at options expiration.
The overall performance results (including commissions) for this ConocoPhillips Covered Calls position were as follows:
Covered Calls Cost Basis: $11,073.34
= ($57.54 - $2.18) *200 shares + $1.34 commissions
Net Profit Components:
(a) Options Income: +$436.00
= ($2.18 * 200 shares)
(b) Dividend Income (ConocoPhillips shares assigned at July 30th, 2021 expiration): +$86.00
= ($.43 dividend per share x 200 shares)
(c) Capital Appreciation (COP assigned at $56.00 strike price at options expiration): -$308.00
+($56.00 -$57.54) * 200 shares
2. Lowe's Companies Inc. (LOW) -- Covered Calls Position Closed at Options Expiration
The buy/write transaction was:
07/08/2021 Bought 200 Lowes Companies Inc. shares @ $191.44
07/08/2021 Sold 2 Lowes 07/30/2021 $187.50 Call options @ $6.12
Note: Implied Volatility (IV) of the Call options was at 20.5 when this position was transacted.
07/20/2021 Quarterly ex-dividend of $.80 per share
07/30/2021 Covered Calls position closed out -- two Lowe's Call options
expired in-the-money, so 200 shares were sold at the $187.50 strike
price. Note: the stock price was in-the-money at $192.69 at options expiration.
The overall performance results (including commissions) for this Lowes Companies Inc. Covered Calls position were as follows:
Covered Calls Cost Basis: $37,065.34
= ($191.44 - $6.12) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$1,224.00
= ($6.12 * 200 shares)
(b) Dividend Income (Lowe's stock assigned at July 30th, 2021 options expiration): +$160.00
= ($.80 dividend per share x 200 shares)
(c) Capital Appreciation (200 Lowe's shares assigned at $187.50 strike price at options expiration): -$788.00
+($187.50 - $191.44) * 200 shares
3. Micron Technology Inc. (MU) -- Covered Calls Position Closed at Options Expiration
The Buy/Write transaction was as follows:
06/18/2021 Bought 300 shares of Micron Technology Inc. stock @ $77.00 per share
06/18/2021 Sold 3 Micron July 16th, 2021 $77.50 Call options @ $3.28 per share
07/16/2021 3 MU Call options expired out-of-the-money so 300 MU shares remain in the Covered Calls Advisor Portfolio.
07/20/2021 Continued Covered Calls position by selling 3 MU July 30th, 2021 $75.00 Call options @ $1.52 when stock price was $74.56.
07/30/2021 Covered Calls position closed out -- three Micron Call options
expired in-the-money, so 300 shares were sold at the $75.00 strike
price. Note: the stock price was in-the-money at $77.58 at options expiration.
The overall performance results (including commissions) for this Micron Technology Inc. Covered Calls position were as follows:
Stock Purchase Cost: $22,118.01
= ($77.00 - $3.28) *300 shares + $2.01 commission
Net Profit:
(a) Options Income: +$1,435.98
= (($3.28 + $1.52) *300 shares) - $4.02 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (300 Micron shares assigned at $75.00 strike price at 7/30/2021 options expiration): -$600.00
+($75.00 -$77.00) * 300 shares
Total Net Profit (300 Micron shares assigned at $75.00 strike price at expiration): +$835.98
Please email me with any questions or comments related specifically to this post or whenever you have comments or questions related to Covered Calls investing.
Best Wishes and Godspeed,
Jeff Partlow (the Covered Calls Advisor)
partlow@cox.net
