- Boeing Co. (BA) -- +3.5% absolute return (equivalent to +36.9% annualized return-on-investment) for the 35 days of this investment
- Seagate Technology Holdings PLC (STX) -- +2.2% absolute return (equivalent to +45.3% annualized roi) for the 18 days of this investment
- Wynn Resorts Ltd. (WYNN) -- +1.9% absolute return (equivalent to +64.6% annualized roi) for the 11 days of this investment
The cash now available from the assignment (i.e. closing) of these 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 three closed positions are as follows:
1. Boeing Co. (BA) -- Covered Call Position Assigned at the Options Expiration Date
The buy/write transaction was as follows:
8/27/2021 Bought 100 shares of Boeing Co. stock @ $218.59 per share
8/27/2021 Sold 1 Boeing Sept 17th, 2021 $215.00 Call option @ $8.53 per share
9/17/2021 Boeing Call option expired out-of-the-money so 100 BA shares remain in the Covered Calls Advisor Portfolio.
9/20/2021 Sold 1 Boeing October 1st, 2021 $212.50 Call option @ $5.00 per share when the stock was trading at $212.10.
Note: the Implied Volatility was 32.5 when this Call option was sold.
10/01/2021 Covered Call position closed out -- 1 BA Call option expired in-the-money, so 100 shares were sold at the $112.50 strike price. Note: the stock price was well in-the-money at $226.00 per share at options expiration.
The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $21,006.67
= ($218.59 - $8.53) * 100 shares + $.67 commission
Net Profit Components:
(a) Option Income: +$1,351.66
= ($8.53 + $5.00) * 100 shares - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (BA stock above $212.50 strike price at the Oct. 1st, 2021 expiration): -$609.00
= ($212.50 - $218.59) * 100 shares
Total Net Profit (BA stock was above $212.50 strike price at the Oct. 1st, 2021 expiration): +$742.66
= (+$1,351.66 Call option income +$0.00 dividend income -$609.00 capital appreciation)
Absolute Return-on-Investment : +3.5%
= +$742.66/$21,006.67
Equivalent Annualized Return-on-Investment: +36.9%
= (+$742.66/$21,006.67)*(365/35 days)
2. Seagate Technology Holdings PLC (STX) -- Covered Calls Position Assigned at the Options Expiration Date
The simultaneous buy/write transaction today was as follows:
09/14/2021 Bought 200 Seagate Technology Holdings PLC shares @ $82.25
09/14/2021 Sold 2 Seagate 10/01/2021 $80.00 Call options @ $3.35
Note: the Implied Volatility of the Calls was 27.2 and the comparable Puts was 34.1 when this transaction was executed, well above the S&P 500 Volatility Index (VIX) of 19.5.
09/21/2021 Upcoming quarterly ex-dividend of $.67 per share
10/01/2021 Covered Calls position closed out -- 2 STX Call options expired in-the-money, so 200 shares were sold at the $80.00 strike price. Note: the stock price was well in-the-money at $84.41 per share at options expiration.
The overall performance results (including commissions) for this Seagate Technology Covered Calls position was as follows:
Covered Calls Cost Basis: $15,781.34
= ($82.25 - $3.35) * 200 shares + $1.34 commissions
Net Profit Components:
(a) Options Income: +$668.66
= ($3.35 * 200 shares) - $1.34 commissions
(b) Dividend Income (Seagate shares assigned at Oct. 1st, 2021 options expiration): +$134.00
= ($.67 dividend per share x 200 shares)
(c) Capital Appreciation (Seagate shares assigned at $80.00 strike price at options expiration): -$450.00
+($80.00 - $82.25) * 200 shares
3. Wynn Resorts Ltd.(WYNN) -- Covered Calls Position Closed by Assignment at Options Expiration
The Buy/Write transaction was as follows:
09/21/2021 Bought 300 shares of Wynn Resorts Ltd. shares @ $79.71 per share
09/21/2021 Sold 3 WYNN October 1st, 2021 $75.00 Call options @ $6.15 per share
10/01/2021 Covered Calls position closed out -- 3 WYNN Call options expired in-the-money, so 300 shares were sold at the $75.00 strike price. Note: the stock price was deep in-the-money at $87.21 per share at options expiration.
Stock Purchase Cost: $22,070.01
= ($79.71 - $6.15) * 300 shares + $2.01 commission
Net Profit:
(a) Options Income: +$1,842.99
= ($6.15 * 300 shares) - $3.35 commission
(b) Dividend Income: +$0.00
+($75.00 - $79.71) * 300 shares
Total Net Profit: +$429.99
