Monthly Options Expiration Results through April 14th, 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 March 18th, 2022 options expiration through yesterday's April 14th, 2022 monthly options expiration date. During this past month, the Covered Calls Advisor Portfolio held a total of thirteen positions.   Eight positions were closed out at a profit and five are continuing positions that expired out-of-the-money.  A summary of results for all thirteen positions is provided below:

• Two positions expired in-the-money (stock price above the strike price) on their April 14th, 2022 monthly options expiration dates with the following results: 

1. Micron Technology Inc. (MU) Covered Calls -- +2.6% absolute return in 21 days (equivalent to +44.7% annualized return-on-investment).  
2. Owens Corning (OC) 100% Cash-Secured Puts -- +1.0% absolute return in 8 days (equivalent to +45.7% 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. State Street Corporation (STT) -- +2.2% absolute return in 13 days (equivalent to +60.5% annualized return-on-investment).
2. Comcast Corporation (CMCSA) --  +1.0% absolute return in 13 days (equivalent to +27.3% annualized return-on-investment).
3. EOG Resources Inc. (EOG) -- +1.7% absolute return in 16 days (equivalent to +39.3% annualized return-on-investment).

 

• Two Covered Calls positions were closed early based on a decision by the Covered Calls Advisor to close out the positions with the following results:

1. KeyCorp Inc. (KEY) -- +2.3% absolute return in 26 days (equivalent to +32.8% annualized return-on-investment).
2. JPMorgan Chase & Co. (JPM) --  +0.1% absolute return in 14 days (equivalent to +3.0% annualized return-on-investment).

 

• One Covered Calls position expired in-the-money on its Weekly options expiration date with the following results:

1. Kraft Heinz Company (KHC) -- +2.6% absolute return in 26 days (equivalent to +38.0% annualized return-on-investment).

• Five Covered Calls positions expired out-of-the-money on yesterday's April 14th, 2022 options expiration date.  In each case, the shares remain in the Covered Calls Advisor Portfolio and are currently held at an unrealized loss.  These positions are shown in the right sidebar of this blog as follows:  (1) 500 shares of American Eagle Outfitters Inc.;  (2) 300 shares of Fifth Third Bancorp ;  (3) 600 shares of iShares China Large-Cap ETF;   (4) 200 shares of Lennar Corporation; and (5) 500 shares of Micron Technology Inc.   In the upcoming week, decisions will be made to either sell these shares or to continue them as Covered Calls positions by selling future Call options against the shares currently held.

During the past year (last 12 months) 118 of 126 positions (93.7%) 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 +31.3% during the past year and the average holding period for these 126 closed positions was 20.6 days.  In comparison, the benchmark S&P 500 returned +6.5% during the same prior one-year period.  This 24.8 percentage points outperformance (31.3% actual annualized-return-on-investment return minus 6.5% 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 five 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 at least 10% 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