Aptiv reported very strong quarterly earnings last Thursday and the stock price has made a nice move to a price more than $10.00 higher than its $72.50 strike price. I considered rolling up to a higher strike price, but the bid/ask spreads for the rollout spread transaction were too wide. So, with 11 days remaining until the May 17th options expiration date, I decided not to continue to wait 11 more days to capture a small additional time value profit now remaining in the Calls, but instead to close out the position today at a profit.
With Match Group I faced a very different situation. The original Covered Calls position closed out-of-the-money at last Friday's options expiration. Instead of continuing the Covered Calls position by selling six more Calls against the current 600 MTCH shares, I decided to close out the position today at a loss since Match has an earnings report after market close tomorrow and I prefer to avoid the stock price volatility associated with earnings reports.
Detailed transactions-to-date for both positions and the return-on-investment results are provided below.
The buy/write transaction was:
3/14/2024 Bought 200 Aptiv PLC shares @ $77.04
3/14/2024 Sold 2 APTV 4/19/2024 $75.00 Call options @ $4.40 per share. The Implied Volatility of these Calls was 31.0 when this position was estalished.
4/19/2024 200 Aptiv PLC shares closed out-of-the-money so 2 Calls expired and 200 Aptiv shares remain in the Covered Calls Advisor Portfolio.
The overall performance result (including commissions) for this Aptiv Covered Calls position is as follows:
Aptiv Covered Calls Net Investment: $14,529.34
= ($77.04 - $4.40) * 200 shares + $1.34 commission
Net Profit:
(a) Options Income: -$784.02
= ($4.40 + $2.40 - $10.70) * 200 shares - $4.02 commissions
(b) Dividend Income: +$0.00
= ($0.00 dividends per share x 200 shares)
(c) Capital Appreciation (APTV shares sold at $82.88 per share): +$1,168.00
+($82.88 - $77.04) * 200 shares
The buy/write transaction was:
4/2/2024 Bought 600 Match Group Inc. shares @ $35.28.
4/2/2024 Sold 6 MTCH 4/12/2024 $34.00 Call options @ $1.68 per share. The Implied Volatility of these Calls was 34.4 when this transaction was made.
4/12/2024 Match Group stock price was below the $34.00 strike price, so the Calls expired and the 600 MTCH shares remained in the Covered Calls Advisor Portfolio.
= ($35.28 - $1.68) * 600 shares + $4.02 commission
Net Profit:
(a) Options Income: +$1,479.96
= ($1.68 + $.80) * 600 shares - $8.04 commissions
(b) Dividend Income: +$0.00
= ($0.00 dividends per share x 600 shares)
(c) Capital Appreciation (MTCH shares closed out by selling at $32.25 per share): -$1,818.00
+($32.25 selling price per share - $35.28 stock purchase price) * 600 shares
1. Aptiv PLC (APTV) -- Closed Out Covered Calls Position
3/14/2024 Bought 200 Aptiv PLC shares @ $77.04
3/14/2024 Sold 2 APTV 4/19/2024 $75.00 Call options @ $4.40 per share. The Implied Volatility of these Calls was 31.0 when this position was estalished.
4/19/2024 200 Aptiv PLC shares closed out-of-the-money so 2 Calls expired and 200 Aptiv shares remain in the Covered Calls Advisor Portfolio.
4/23/2024 Continued Covered Calls position by selling 2 APTV 5/17/2024 Call options at the $72.50 strike price for $2.40 per share when the stock price was $70.65.
5/6/2024 I decided to close out this Aptiv Covered Calls position early by buying-to-close the 2 May 17th, 2024 $72.50 Call options at $10.70 per share and simultaneously selling-to-close the 200 shares at $82.88 -- a net credit of $72.08 per share.
Aptiv Covered Calls Net Investment: $14,529.34
= ($77.04 - $4.40) * 200 shares + $1.34 commission
Net Profit:
(a) Options Income: -$784.02
= ($4.40 + $2.40 - $10.70) * 200 shares - $4.02 commissions
(b) Dividend Income: +$0.00
= ($0.00 dividends per share x 200 shares)
(c) Capital Appreciation (APTV shares sold at $82.88 per share): +$1,168.00
+($82.88 - $77.04) * 200 shares
Total Net Profit: +$383.98
= (-$784.02 options income +$0.00 dividend income + $1,168.00 capital appreciation)
Absolute Return-on-Investment: +2.6%
= +$383.98/$14,529.34
Annualized Return-on-Investment: +18.2%
= (+$383.98/$14,529.34) * (365/53 days)
2. Match Group Inc. (MTCH) -- Closed Out Covered Calls Position
4/2/2024 Bought 600 Match Group Inc. shares @ $35.28.
4/2/2024 Sold 6 MTCH 4/12/2024 $34.00 Call options @ $1.68 per share. The Implied Volatility of these Calls was 34.4 when this transaction was made.
4/12/2024 Match Group stock price was below the $34.00 strike price, so the Calls expired and the 600 MTCH shares remained in the Covered Calls Advisor Portfolio.
4/15/2024 Continued this Match Group Covered Calls position by selling six May 3rd, 2024 $33.50 Call options @ $.80 per share when the stock was trading today at $32.75.
5/3/2024 Match Group stock closed out-of-the-money at $32.00 per share, so 600 MTCH shares remain in the Covered Calls Advisor Portfolio.
5/6/2024 Closed out this Covered Calls position by selling 600 shares at $32.25 per share.
The overall performance result (including commissions) for this Match Group Covered Calls position is as follows:
Match Group Covered Calls Net Investment: $20,164.02= ($35.28 - $1.68) * 600 shares + $4.02 commission
Net Profit:
(a) Options Income: +$1,479.96
= ($1.68 + $.80) * 600 shares - $8.04 commissions
(b) Dividend Income: +$0.00
= ($0.00 dividends per share x 600 shares)
(c) Capital Appreciation (MTCH shares closed out by selling at $32.25 per share): -$1,818.00
+($32.25 selling price per share - $35.28 stock purchase price) * 600 shares
Total Net Loss: -$338.04
= (+$1,479.96 options income +$0.00 dividend income -$1,818.00 capital appreciation)
Absolute Return-on-Investment: -1.7%
= -$338.04/$20,164.02
Annualized Return-on-Investment: -18.0%
= (-$338.04/$20,164.02) * (365/34 days)
