Monthly Options Expiration Results through March 18th, 2022

Each month on the day after the monthly options expiration date, this summary report provides the results on all positions that have been closed out during the past month (i.e. since the prior month's options expiration date). So this post covers the period from the day after last month's February 18th, 2022 options expiration through Friday's March 18th, 2022 monthly options expiration date. During this past month, the Covered Calls Advisor Portfolio held a total of twenty-one positions.   Seventeen positions were closed out at a profit, one was closed at a loss, and three are continuing positions that expired out-of-the-money.  A summary of results for all nineteen positions is provided below:

• Nine Covered Calls positions expired in-the-money (stock price above the strike price) on their March 18th, 2022 monthly options expiration dates with the following results: 

1. Bank of America Corporation (BAC) -- +1.5% absolute return in 19 days (equivalent to +29.5% annualized return-on-investment).  
2. FedEx Corporation (FDX) -- +2.1% absolute return in 23 days (equivalent to +33.1% annualized return-on-investment). 
3. General Motors Company (GM) -- -3.6% absolute return in 32 days (equivalent to -40.9% annualized return-on-investment).  
4. Goldman Sachs Group Inc. (GS) -- +2.0% absolute return in 29 days (equivalent to +25.4% annualized return-on-investment).
5. Meta Platforms Inc. (FB) -- +1.2% absolute return in 44 days (equivalent to +9.6% annualized return-on-investment).  
6. Nucor Corporation (NUE) -- +0.6% absolute return in 72 days (equivalent to +2.8% annualized return-on-investment). 
7. Pioneer Natural Resources Company (PXD) -- +3.0% absolute return in 25 days (equivalent to +43.7% annualized return-on-investment).  
8. Salesforce.Com Inc. (CRM) -- +1.9% absolute return in 15 days (equivalent to +47.2% annualized return-on-investment).
9. Uber Technologies Inc. (UBER) -- +2.8% absolute return in 33 days (equivalent to +31.4% annualized return-on-investment). 
   

 

• Four 100% Cash-Secured Puts positions expired out-of-the-money (i.e. stock price above the strike price) on their March 18th, 2022 monthly options expiration dates with the following results:

1. Boeing Company (BA) -- +3.0% absolute return in 23 days (equivalent to +47.1% annualized return-on-investment).
2. Crocs Inc. (CROX) -- +3.4% absolute return in 17 days (equivalent to +73.8% annualized return-on-investment).
3. Mercado Libre Inc. (MELI) -- +4.8% absolute return in 23 days (equivalent to +75.5% annualized return-on-investment).
4. Owens Corning (OC) -- +2.2% absolute return in 17 days (equivalent to +46.3% annualized return-on-investment).

• Three deep-in-the-money Covered Calls positions were closed by Early Assignment on the day prior to their ex-dividend dates with the following results:

1. Devon Energy Corporation (DVN) -- +1.1% absolute return in 4 days (equivalent to +104.8% annualized return-on-investment).
2. Energy Select Sector SPDR Fund (XLE) --  +0.9% absolute return in 5 days (equivalent to +67.3% annualized return-on-investment).
3. Financial Select Sector SPDR Fund (XLF) -- +0.5% absolute return in 4 days (equivalent to +42.1% annualized return-on-investment).

 

• Two Covered Calls positions expired in-the-money on their Weekly options expiration dates (Schlumberger Ltd. on February 25th, 2022 and Qualcomm Inc. on March 11th, 2022) with the following results:

1. Qualcomm Inc. (QCOM) -- +1.4% absolute return in 11 days (equivalent to +48.1% annualized return-on-investment).
2. Schlumberger Ltd. (SLB) --  +1.3% absolute return in 12 days (equivalent to +40.3% annualized return-on-investment).

• Three Covered Calls positions expired out-of-the-money on the March 18th, 2022 options expiration date: (1) 500 shares of American Eagle Outfitters Inc.; (2) 400 shares of KeyCorp Inc.; and (3) 200 shares of Lennar Corporation now remain in the Covered Calls Advisor Portfolio.  These positions are shown in the right sidebar of this blog.  In the upcoming week, decisions will be made soon to either sell these shares or to continue with their Covered Calls positions by selling future Call options against the shares currently held.

 

During the past year (last 12 months) 123 of 131 positions (93.9%) in the Covered Calls Advisor Portfolio (CCAP) were closed out at a profit, which exceeded by a wide margin the Covered Calls Advisor's objective that at least two-thirds (66.7%) of positions be closed profitably.  The Covered Calls Advisor Portfolio weighted average annualized-return-on-investment (aroi) was +31.4% during the past year and the average holding period for these 131 closed positions was 20.7 days.  In comparison, the benchmark S&P 500 index returned +14.1% during the same prior one-year period.  This 17.3 percentage points outperformance (31.4% actual annualized-return-on-investment return minus 14.1% aroi of the S&P 500 benchmark) during the past year by the Covered Calls Advisor Portfolio exceeds that which can normally be expected using the Covered Calls investing strategy.  As indicated in this post made earlier this year on this blog site (Link) -- "by exploiting our Covered Calls investing "edges", we can expect to achieve (over a period of several years) an average annualized-return-on-investment above the S&P 500 benchmark index of approximately 3 to 5 percentage points annually".

My preference is to identify opportunities to utilize my Dividend Capture Strategy (with ex-dividend dates prior to the options expiration dates) for relatively low-growth dividend-paying companies within these lower-growth Sectors -- Consumer Staples, Energy, Financials, Industrials, Materials, Real Estate, and Utilities.  Higher growth companies in Sectors with fewer dividend-paying companies includes the Communication Services, Consumer Discretionary, Healthcare, and Information Technology Sectors.  There is a greater likelihood that Covered Calls or Cash-Secured Puts positions in these higher-growth Sectors will be established without utilizing the Dividend Capture Strategy (i.e. without ex-dividend dates prior to their options expiration dates).  

As shown in the right sidebar, there are currently six open positions in the Covered Calls Advisor Portfolio.  Future transactions and return-on-investment results for these positions plus the details of all future newly established positions will be posted on this blog site on the same day the transactions occur.  New positions will be focused on companies that, at a minimum, have the following characteristics: (1) good valuation metrics (such as high free cash flow yield); (2) appear in at least one of the many stock screeners that have been developed over the years by the Covered Calls Advisor; (3) estimated next year earnings-per-share above that of their actual prior year; and (4) analysts' average target price is above the current stock price. 

This Covered Calls Advisor blog is a free service available to anyone interested in learning about Covered Calls.  As always, I welcome your emails whenever you have any comments or questions related to this post or anything related to Covered Calls investing.

Best Wishes and Godspeed,
Jeff Partlow
Covered Calls Advisor
partlow@cox.net