- Cabot Oil & Gas Corp. (COG) -- +0.6% absolute return (equivalent to +8.0% annualized return-on-investment) for the 29 days of this investment
- Micron Technology Inc. (MU) -- +3.9% absolute return (equivalent to +118.8% annualized roi) for the 12 days of this investment
The cash now available from the assignment (i.e. closing) of these 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 at moderately in-the-money strike prices with good downside protection.
The detailed transactions and results for these two closed positions are as follows:
1. Cabot Oil & Gas Corp. (COG) -- Covered Calls Closed by Assignment at Options Expiration
The original buy/write transaction was as follows:
08/05/2021 Bought 600 Cabot shares @ $15.86
08/05/2021 Sold 6 COG 8/20/2021 $15.50 Call options @ $.61
Note: A simultaneous buy/write transaction was executed. The Implied Volatility of the Call options was 30.5 when this Covered Calls position was established.
08/11/2021 Quarterly ex-dividend of $.11 per share
08/20/2021 6 COG $15.50 Call options expired and 600 COG shares remain in the Covered Calls Advisor Portfolio
08/23/2021 Continued COG Covered Calls position by selling 6 Sept. 3rd, 2021 $15.00 Calls @ the sell-to-open limit order of $.25 per share when the stock price was $14.71, the bid/ask price was $.20/$.30, and the Implied Volatility of the Call options was 30.8.
09/03/2021 Covered Calls position closed out -- 6 COP Call options expired in-the-money, so 600 shares were sold at the $15.00 strike price. Note: the stock price was well in-the-money at $17.81 per share at options expiration.
The overall performance results (including commissions) for this Cabot Oil and Gas Covered Calls position were as follows:
Covered Calls Cost Basis: $9,154.02
= ($15.86 - $.61) * 600 shares + $4.02 commissions
Net Profit Components:
(a) Options Income: +$507.96
= ($.61 + $.25) * 600 shares - $8.04 commissions
(b) Dividend Income: +$66.00
= ($.11 dividend per share x 600 shares)
(c) Capital Appreciation (COG share price above $15.00 strike price upon Sept. 3rd, 2021 options expiration, so 600 shares assigned at $15.00): -$516.00
+($15.00 -$15.86) * 600 shares
2. Micron Technology Inc. (MU) -- Covered Calls Closed by Assignment at Options Expiration
The original Buy/Write transaction was:
08/23/2021 Bought 300 shares of Micron Technology Inc. stock @ $71.25 per share
08/23/2021 Sold 3 Micron September 3rd, 2021 $73.00 Call options @ $1.00 per share
9/03/2021 Covered Calls position closed out -- 3 MU Call options expired in-the-money, so 300 shares were sold at the $73.00 strike price. Note: the stock price was in-the-money at $73.81 per share at options expiration.
The overall performance results (including commissions) for this Micron Technology Inc. Covered Calls position were:
Stock Purchase Cost: $21,077.01
= ($71.25 - $1.00) *300 shares + $2.01 commission
Net Profit:
(a) Options Income: +$297.99
= ($1.00 *300 shares) - $2.01 commission
(b) Dividend Income: +$0.00
+($73.00 -$71.25) * 300 shares
Total Net Profit (300 Micron shares assigned at $73.00 strike price at expiration): +$822.99 = (+$297.99 options income +$0.00 dividend income +$525.00) capital appreciation
