Monthly Options Expiration Results through September 15th, 2023

Each month 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 August 18th, 2023 options expiration through yesterday's September 15th, 2023 monthly options expiration date.  

During this past month, the Covered Calls Advisor Portfolio held a total of fifteen positions.  Eleven positions were closed out at a profit, one position was closed out at a loss, three positions expired out-of-the-money on yesterday's monthly options expiration date (so those shares currently remain in the Covered Calls Advisor Portfolio), and one position in Delta Air Lines was rolled out yesterday to the October 6th, 2023 options expiration date.   

The specific results for each position are summarized as follows: 

• Three Covered Calls positions expired in-the-money (stock price above the strike price) on yesterday's September 15th, 2023 monthly options expiration date as follows: 

1. Cigna Group -- +1.2% absolute return-on-investment in 14 days (equivalent to a +30.1% annualized return-on-investment).
2. Honeywell International Inc. -- +2.5% absolute return-on-investment in 46 days (equivalent to a +20.2% annualized return-on-investment).
3. Match Group Inc. -- +3.3% absolute return-on-investment in 21 days (equivalent to a +57.2% annualized return-on-investment).

• Four Covered Calls positions expired in-the-money on their respective Weekly options expiration dates during the past month as follows:

1. PayPal Holdings Inc. -- +1.1% absolute return-on-investment in 14 days (equivalent to a +28.3% annualized return-on-investment).
2. Alphabet Inc. -- +1.2% absolute return-on-investment in 11 days (equivalent to a +38.6% annualized return-on-investment).
3. iShares China Large-Cap ETF -- +1.0% absolute return-on-investment in 30 days (equivalent to a +11.8% annualized return-on-investment).
4. Uber Technologies Inc. -- +1.9% absolute return-on-investment in 17 days (equivalent to a +41.4% annualized return-on-investment).

• Two Covered Call positions were closed out by early assignment on the day prior to their respective ex-dividend dates as follows: 

1. Bank of America Corporation -- +1.0% absolute return-on-investment in 10 days (equivalent to a +36.0% annualized return-on-investment).
2. McDonald's Corporation -- +0.7% absolute return-on-investment in 10 days (equivalent to a +26.9% annualized return-on-investment).

• Two Covered Call positions were closed out by early decision as follows: 

1. Archer-Daniels-Midland Company -- -1.0% absolute return-on-investment in 17 days (equivalent to a -22.0% annualized return-on-investment).
2. Halliburton Company -- +1.3% absolute return-on-investment in 8 days (equivalent to a +60.7% annualized return-on-investment).

• Three Covered Calls positions in Halozyme Therapeutics Inc., iShares China Large-Cap ETF, and SolarEdge Technologies Inc. closed out-of-the-money yesterday on their September 15th, 2023 monthly options expiration date, so the options expired and the shares now remain in the Covered Calls Advisor Portfolio.  Early next week, a decision will be made to either close out the positions by selling the shares or to continue the Covered Calls positions by selling future Call options against the shares currently held.  As always, the details of all transactions will be posted on this blog site on the same day the transactions occur.

My final Covered Calls position in Delta Air Lines Inc. was due to expire yesterday.  Like all airlines, Delta's costs are rising substantially as a result of the recent spike upward in the price of jet fuel.  The stock price was well out-of-the-money and I decided to continue the position, so I rolled down and out from the 9/15 $43.00 strike price to the October 6th $41.00 strike price.  The transactions history and a potential return-on-investment result if the position is assigned on its 10/6 expiration date is shown below:

Delta Air Lines Inc. (DAL) -- Continuation of Covered Calls Position

The original Buy/Write transaction was as follows:
7/24/2023 Bought 500 shares of Delta Air Lines Inc. @ $47.49 per share 
7/24/2023 Sold 5 DAL August 4th, 2023 $46.00 Call options @ $1.93 per share
8/4/2023 Five DAL Calls expired out-of-the-money so the 500 shares remained in the Covered Calls Advisor Portfolio.
8/7/2023 Continued this Delta Air Lines Inc. Covered Calls position by selling 5 Delta August 18th, 2023 Call options at the $45.00 strike price for $.56 per share.  The FXI share price was $44.93 when these Calls were sold and their Implied Volatility was 39.6.

8/18/2023 Five DAL Calls expired out-of-the-money so the 500 shares remained in the Covered Calls Advisor Portfolio.
8/21/2023 Continued this Delta Air Lines Inc. Covered Calls position by selling 5 Delta September 1st, 2023 Call options at the $43.00 strike price for $.49 per share.  The Delta share price was $41.80 when these Calls were sold.

9/1/2023 Continued this Delta Air Lines Inc. Covered Calls position by selling 5 Delta September 15th, 2023 Call options at the $43.00 strike price for $.54 per share.

9/15/2023 Rolled the 5 DAL Call options down and out to the October 6th, 2023 $41.00 strike price at $.53 per share when the stock was trading at $39.83.

 
A possible overall performance result (including commissions) for this Delta Air Lines Inc. Covered Calls position if the stock is in-the-money at its options expiration date is as follows:
Delta Air Lines Covered Calls Net Investment: $22,783.35
= ($47.49 - $1.93) * 500 shares + $3.35 commission

Net Profit Potential:
(a) Options Income: +$2,203.25
= ($1.93 + $.95 + $.49 + $.54 + $.53) * 500 shares - $16.75 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 500 Delta Air Lines shares assigned at $41.00 strike price at the 10/6/2023 options expiration date): -$3,245.00
+($41.00 - $47.49) * 500 shares

Potential Total Net Profit (If 500 Delta Air Lines shares assigned at the $41.00 strike price upon options expiration): -$1,041.75
= (+$2,203.25 options income +$0.00 dividend income -$3,245.00 capital appreciation)

Absolute Return-on-Investment Potential: -4.6%
= -$1,041.75/$22,783.35
Annualized Return-on-Investment Potential: -22.6%
= (-$1,041.75/$22,783.35) * (365/74 days)

During the past year (last 12 months) 117 of 131 positions (89.3%) in the Covered Calls Advisor Portfolio (CCAP) were closed out at a profit.  The Covered Calls Advisor Portfolio weighted average annualized-return-on-investment (aroi) was +21.6% during the past year and the average holding period for these 131 closed positions was 18.1 days.  In comparison, the benchmark S&P 500 returned +14.1% during the same prior one-year period.   

This Covered Calls Advisor blog is available to anyone interested in learning about implementing a successful Covered Calls investing strategy.  As always, I also encourage you to email me at partlow@cox.net any time you would like my feedback on your Covered Call position ideas or your questions on anything related to the Covered Calls investing strategy.  

Best Wishes and Godspeed,

Jeff Partlow
Covered Calls Advisor
partlow@cox.net