Two new covered call positions were established today in the Covered Calls Advisor Portfolio(CCAP) as follows:
1. Humana Inc Covered Calls Established for Dec07
11/19/07 Bought 500 HUM @ 71.60
11/19/07 Sold 5 HUM Dec07 75 Calls @ $1.70
Annualized Return If Unchanged: 26.2%
Annualized Return If Exercised: 78.8%
Downside Breakeven Protection: 2.4%
2. Travelers Companies Covered Calls Established for Dec07
11/19/07 Bought 500 TRV @ 51.23
11/19/07 Sold 5 TRV Dec07 55 Calls @ $.55
Annualized Return If Unchanged: 18.1%
Annualized Return If Exercised: 99.5%
Downside Breakeven Protection: 1.6%
Monday, November 19, 2007
November 2007 Expiration Closing Transactions
The Covered Calls Advisor Portfolio (CCAP) contained a total of 8 positions with Nov07 expirations with the following results so far:
- 2 positions closed in-the-money and the calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results were:
McDonald's -- +92.6%
Merck -- +39.5%
- 6 positions (ACN,LLY,HAL,HON,EWY,JPM) ended out-of-the-money. Three positions were closed out today by selling the stock. The 3 closed positions were Accenture(ACN), JP Morgan(JPM), and Eli Lilly(LLY), and each of their annualized return-on-investment (ROI) %s are summarized as follows:
Accenture -- -116.0%
JP Morgan -- -61.0%
Eli Lilly -- -61.3%
These 3 covered call positions were poor investments. However, this advisor believes that sometimes it is better to accept your losses and re-apply the assets where there are better future opportunities. This is the case with these three and the reason for deciding to sell out of the stock is presented below in each case. The transactions history and performance results for each of these 3 covered call positions is provided below:
1. Accenture – Closed
It was decided to close out the ACN position since there is an earnings release prior to the Dec07 expiration date and this advisor prefers not to hold stocks during earnings releases.
Transactions History:
10/23/07 Initial Stock Position -- Bought 1000 ACN @ 39.48
10/23/07 Option Exercised –- Sold 10 ACN Nov07 40 Calls @ $1.05
11/17/07 Nov07 Option Expiration Date – ACN closed below the strike price
11/19/07 Sold 1000 ACN @ $35.08
Performance Results(including commissions):
Stock Purchase Cost: $39,489.95 ($39.48*1000+$9.95 commissions)
Options Income: $1,032.55 ($1.05*1000-$17.45 commissions)
Dividend Income: $0
Capital Appreciation: -$4,419.90 [($35.08*1000-$9.95)-$39,489.95]
Net Profit: -$3,387.35 ($1,032.55-$4,419.90)
ANNUALIZED RETURN ON INVESTMENT:
(-$3,387.35/$39,489.95)*(365/27 days) = -116.0%
2. JPM – Closed
It was a difficult decision whether to continue with or close out this JPM holding.
What caused this advisor to decide to sell out was the fact that JPM has some credit write-off issues, and although modest compared with some other large money-center banks, it still provides a cloud that could continue to adversely effect the stock's perception and price for a while.
Transactions History:
10/23/07 Initial Stock Position -- Bought 500 JPM @ 45.58
10/23/07 Ititial Calls Position -- Sold 5 JPM Nov07 45 Calls @ $1.75
11/17/07 Nov07 Option Expiration Date – JPM closed below the strike price
11/19/07 Sold 500 JPM @ $41.82
Performance Results(including commissions):
Stock Purchase Cost: $22,799.95 ($45.58*500+$9.95 commissions)
Options Income: $861.30 ($1.75*500-$13.70 commissions)
Dividend Income: $0
Capital Appreciation: -$1,899.90 [($41.82*500-$9.95)-($45.58*500-$9.95)]
Net Profit: -$1,028.60 ($861.30-$1,899.90)
ANNUALIZED RETURN ON INVESTMENT:
(-$1,028.60/$22,799.95)*(365/27 days) = -61.0%
3. LLY – Closed
This position was closed out because analysts' consensus future earnings estimates for LLY have decreased since this purchase which is reason enough alone to sell the stock according to this advisor's methodology.
Transactions History:
10/23/07 Initial Stock Position -- Bought 500 LLY @ 56.48
10/23/07 Initial Calls Position -- Sold 5 LLY Nov07 55 Calls @ $2.95
11/13/07 Dividend Received -- 500 @ $.425
11/17/07 Nov07 Option Expiration Date – LLY closed below the strike price
11/19/07 Sold 500 LLY @ $50.62
Performance Results(including commissions):
Stock Purchase Cost: $28,249.95 ($56.48*500+$9.95 commissions)
Options Income: $1,461.30 ($2.95*500-$13.70 commissions)
Dividend Income: $212.50 (500*$.425)
Capital Appreciation: -$2,949.90 [($50.62*500-$9.95)-($56.48*500-$9.95)]
Net Profit: -$1,276.10 ($1,461.30+$212.50-$2,949.90)
ANNUALIZED RETURN ON INVESTMENT:
(-$1,276.10/$28,149.95)*(365/27 days) = -61.3%
- 2 positions closed in-the-money and the calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results were:
McDonald's -- +92.6%
Merck -- +39.5%
- 6 positions (ACN,LLY,HAL,HON,EWY,JPM) ended out-of-the-money. Three positions were closed out today by selling the stock. The 3 closed positions were Accenture(ACN), JP Morgan(JPM), and Eli Lilly(LLY), and each of their annualized return-on-investment (ROI) %s are summarized as follows:
Accenture -- -116.0%
JP Morgan -- -61.0%
Eli Lilly -- -61.3%
These 3 covered call positions were poor investments. However, this advisor believes that sometimes it is better to accept your losses and re-apply the assets where there are better future opportunities. This is the case with these three and the reason for deciding to sell out of the stock is presented below in each case. The transactions history and performance results for each of these 3 covered call positions is provided below:
1. Accenture – Closed
It was decided to close out the ACN position since there is an earnings release prior to the Dec07 expiration date and this advisor prefers not to hold stocks during earnings releases.
Transactions History:
10/23/07 Initial Stock Position -- Bought 1000 ACN @ 39.48
10/23/07 Option Exercised –- Sold 10 ACN Nov07 40 Calls @ $1.05
11/17/07 Nov07 Option Expiration Date – ACN closed below the strike price
11/19/07 Sold 1000 ACN @ $35.08
Performance Results(including commissions):
Stock Purchase Cost: $39,489.95 ($39.48*1000+$9.95 commissions)
Options Income: $1,032.55 ($1.05*1000-$17.45 commissions)
Dividend Income: $0
Capital Appreciation: -$4,419.90 [($35.08*1000-$9.95)-$39,489.95]
Net Profit: -$3,387.35 ($1,032.55-$4,419.90)
ANNUALIZED RETURN ON INVESTMENT:
(-$3,387.35/$39,489.95)*(365/27 days) = -116.0%
2. JPM – Closed
It was a difficult decision whether to continue with or close out this JPM holding.
What caused this advisor to decide to sell out was the fact that JPM has some credit write-off issues, and although modest compared with some other large money-center banks, it still provides a cloud that could continue to adversely effect the stock's perception and price for a while.
Transactions History:
10/23/07 Initial Stock Position -- Bought 500 JPM @ 45.58
10/23/07 Ititial Calls Position -- Sold 5 JPM Nov07 45 Calls @ $1.75
11/17/07 Nov07 Option Expiration Date – JPM closed below the strike price
11/19/07 Sold 500 JPM @ $41.82
Performance Results(including commissions):
Stock Purchase Cost: $22,799.95 ($45.58*500+$9.95 commissions)
Options Income: $861.30 ($1.75*500-$13.70 commissions)
Dividend Income: $0
Capital Appreciation: -$1,899.90 [($41.82*500-$9.95)-($45.58*500-$9.95)]
Net Profit: -$1,028.60 ($861.30-$1,899.90)
ANNUALIZED RETURN ON INVESTMENT:
(-$1,028.60/$22,799.95)*(365/27 days) = -61.0%
3. LLY – Closed
This position was closed out because analysts' consensus future earnings estimates for LLY have decreased since this purchase which is reason enough alone to sell the stock according to this advisor's methodology.
Transactions History:
10/23/07 Initial Stock Position -- Bought 500 LLY @ 56.48
10/23/07 Initial Calls Position -- Sold 5 LLY Nov07 55 Calls @ $2.95
11/13/07 Dividend Received -- 500 @ $.425
11/17/07 Nov07 Option Expiration Date – LLY closed below the strike price
11/19/07 Sold 500 LLY @ $50.62
Performance Results(including commissions):
Stock Purchase Cost: $28,249.95 ($56.48*500+$9.95 commissions)
Options Income: $1,461.30 ($2.95*500-$13.70 commissions)
Dividend Income: $212.50 (500*$.425)
Capital Appreciation: -$2,949.90 [($50.62*500-$9.95)-($56.48*500-$9.95)]
Net Profit: -$1,276.10 ($1,461.30+$212.50-$2,949.90)
ANNUALIZED RETURN ON INVESTMENT:
(-$1,276.10/$28,149.95)*(365/27 days) = -61.3%
Halliburton and Honeywell -- Continuation Transactions
1. Halliburton (HAL) Continuation Transaction
I confess that I'm not a big fan of the Energy sector right now as it is likely that the price of oil is now peaking in the $95 range and could well hit $70 before it reaches $100. However, I am committed to diversification, so I've decided to retain the HAL holding.
The following transaction was made today to continue the covered calls written against the 700 shares of HAL:
11/19/07 Covered Calls Continuation Transaction -- STO 7 Dec07 37.5 Calls @ $.85
The Transactions History to date is as follows:
10/24/07 Initial Stock Position -- Bought 700 HAL @ 40.01
10/24/07 Initial Call Options -- Sold 7 HAL Nov07 40 Calls @ $1.25
11/17/07 Nov07 Option Expiration Date – HAL closed below the strike price at $37.02
11/19/07 Covered Calls Continuation Transaction -- STO 5 Dec07 37.5 Calls @ $.85
The overall performance results(including commissions)for the HAL transactions through Dec07 expiration would be as follows:
Stock Purchase Cost: $28,016.95
($40.01*700+$9.95 commission)
Net Profit:
(a) Options Income: $1,439.60 (700*$1.25 + 700*.85)
(b) Dividend Income: $63.00 ($.09*700)
(c) Capital Appreciation (If stock price unchanged from $37.02): -$2,112.90
(c) Capital Appreciation (If exercised): -$1,776.90
Total Net Profit(If stock price unchanged at $37.02): -$610.30 ($1,439.60+$63.00-$2,112.90)
Total Net Profit(If stock price exercised at $37.50): -$274.30 ($1,439.60+$63.00-$1,776.90)
Annualized Return If Unchanged (ARIU) -13.5% (-$610.30/$28,016.95)*(365/59)
Annualized Return If Exercised (ARIE) -6.1% (-$274.30/$28,016.95)*(365/59)
2. Honeywell (HON) Continuation Transaction
Each of the last two months the Covered Calls Advisor Portfolio (CCAP) has attempted to roll up to the 60 strike price to get the stock to be called away at 60. The stock has been a yo-yo recently between the 55 and 60 range and is now at the lower end. I remain bullish on the company and am confident the Dave & Dave management team will be successful in achieving their revenue and earnings growth plans; therefore the HON holding is retained.
The following transaction was made today to continue the covered calls written against the 500 shares of HON:
11/19/07 Covered Calls Continuation Transaction -- STO 5 Dec07 57.5 Calls @ $.90
A summary of the HON transactions so far, including today's roll up is as follows:
9/10/07 Initial Stock Position -- BTO 500 HON @ 54.23
9/10/07 Initial Call Options -- STO 5 HON Oct07 55 Calls @ 1.80
9/26/07 Roll Up Transaction -- BTC 5 HON Oct 55s @ $4.70
9/26/07 Roll Up Transaction -- STO 5 HON Oct 60s @ $1.10
10/20/07 Oct07 Option Expiration Date – HON closed below the strike price at $58.32
10/22/07 Covered Calls Continuation Transaction -- STO 5 Nov07 57.5 Calls @ $2.25
10/30/07 Roll Up Transaction -- (BTC) 5 HON Nov 57.5s @ $3.00
10/30/07 Roll Up Transaction -- (STO) 5 HON Nov 60s @ $1.25 The stock was trading at $59.83 when this roll-up transaction was made.
11/16/07 Dividend Received -- 500 @ $.25
11/17/07 Nov07 Option Expiration Date – HON closed below the strike price at $55.88
11/19/07 Covered Calls Continuation Transaction -- STO 5 Dec07 57.5 Calls @ $.90
The overall performance results(including commissions)for the HON transactions through Dec07 expiration would be as follows:
Stock Purchase Cost: $27,124.95
($54.23*500+$9.95 commission)
Net Profit:
(a) Options Income: -$704.80
(b) Dividend Income: $125.00 ($.25*500)
(c) Capital Appreciation (If stock price unchanged from $55.88): $760.10
(c) Capital Appreciation (If exercised): $1,565.10
Total Net Profit(If stock price unchanged at $55.88): $180.30 (-$704.80+$125.00+$760.10)
Total Net Profit(If stock price exercised at $57.50): $985.30 (-$704.80+$125.00+$1,565.10)
Annualized Return If Unchanged (ARIU) 2.4% ($180.30/$27,124.95)*(365/103)
Annualized Return If Exercised (ARIE) 12.9% ($985.30/$27,124.95)*(365/103)
I confess that I'm not a big fan of the Energy sector right now as it is likely that the price of oil is now peaking in the $95 range and could well hit $70 before it reaches $100. However, I am committed to diversification, so I've decided to retain the HAL holding.
The following transaction was made today to continue the covered calls written against the 700 shares of HAL:
11/19/07 Covered Calls Continuation Transaction -- STO 7 Dec07 37.5 Calls @ $.85
The Transactions History to date is as follows:
10/24/07 Initial Stock Position -- Bought 700 HAL @ 40.01
10/24/07 Initial Call Options -- Sold 7 HAL Nov07 40 Calls @ $1.25
11/17/07 Nov07 Option Expiration Date – HAL closed below the strike price at $37.02
11/19/07 Covered Calls Continuation Transaction -- STO 5 Dec07 37.5 Calls @ $.85
The overall performance results(including commissions)for the HAL transactions through Dec07 expiration would be as follows:
Stock Purchase Cost: $28,016.95
($40.01*700+$9.95 commission)
Net Profit:
(a) Options Income: $1,439.60 (700*$1.25 + 700*.85)
(b) Dividend Income: $63.00 ($.09*700)
(c) Capital Appreciation (If stock price unchanged from $37.02): -$2,112.90
(c) Capital Appreciation (If exercised): -$1,776.90
Total Net Profit(If stock price unchanged at $37.02): -$610.30 ($1,439.60+$63.00-$2,112.90)
Total Net Profit(If stock price exercised at $37.50): -$274.30 ($1,439.60+$63.00-$1,776.90)
Annualized Return If Unchanged (ARIU) -13.5% (-$610.30/$28,016.95)*(365/59)
Annualized Return If Exercised (ARIE) -6.1% (-$274.30/$28,016.95)*(365/59)
2. Honeywell (HON) Continuation Transaction
Each of the last two months the Covered Calls Advisor Portfolio (CCAP) has attempted to roll up to the 60 strike price to get the stock to be called away at 60. The stock has been a yo-yo recently between the 55 and 60 range and is now at the lower end. I remain bullish on the company and am confident the Dave & Dave management team will be successful in achieving their revenue and earnings growth plans; therefore the HON holding is retained.
The following transaction was made today to continue the covered calls written against the 500 shares of HON:
11/19/07 Covered Calls Continuation Transaction -- STO 5 Dec07 57.5 Calls @ $.90
A summary of the HON transactions so far, including today's roll up is as follows:
9/10/07 Initial Stock Position -- BTO 500 HON @ 54.23
9/10/07 Initial Call Options -- STO 5 HON Oct07 55 Calls @ 1.80
9/26/07 Roll Up Transaction -- BTC 5 HON Oct 55s @ $4.70
9/26/07 Roll Up Transaction -- STO 5 HON Oct 60s @ $1.10
10/20/07 Oct07 Option Expiration Date – HON closed below the strike price at $58.32
10/22/07 Covered Calls Continuation Transaction -- STO 5 Nov07 57.5 Calls @ $2.25
10/30/07 Roll Up Transaction -- (BTC) 5 HON Nov 57.5s @ $3.00
10/30/07 Roll Up Transaction -- (STO) 5 HON Nov 60s @ $1.25 The stock was trading at $59.83 when this roll-up transaction was made.
11/16/07 Dividend Received -- 500 @ $.25
11/17/07 Nov07 Option Expiration Date – HON closed below the strike price at $55.88
11/19/07 Covered Calls Continuation Transaction -- STO 5 Dec07 57.5 Calls @ $.90
The overall performance results(including commissions)for the HON transactions through Dec07 expiration would be as follows:
Stock Purchase Cost: $27,124.95
($54.23*500+$9.95 commission)
Net Profit:
(a) Options Income: -$704.80
(b) Dividend Income: $125.00 ($.25*500)
(c) Capital Appreciation (If stock price unchanged from $55.88): $760.10
(c) Capital Appreciation (If exercised): $1,565.10
Total Net Profit(If stock price unchanged at $55.88): $180.30 (-$704.80+$125.00+$760.10)
Total Net Profit(If stock price exercised at $57.50): $985.30 (-$704.80+$125.00+$1,565.10)
Annualized Return If Unchanged (ARIU) 2.4% ($180.30/$27,124.95)*(365/103)
Annualized Return If Exercised (ARIE) 12.9% ($985.30/$27,124.95)*(365/103)
Saturday, November 17, 2007
November Expiration Transactions
The Covered Calls Advisor Portfolio (CCAP) contained a total of 8 positions with Nov07 expirations with the following results:
- 2 positions closed in-the-money and the calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results were:
McDonald's -- 92.6%
Merck -- 39.5%
- 6 positions (ACN,LLY,HAL,HON,EWY,JPM) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish Dec07covered call positions. The related transactions will be made Monday morning and the actual transactions will be posted at that time.
Details for the two exercised positions were as follows:
1. McDonald's -- Closed
As you might recall, McDonald's was first identified as a 'Special Situation' by this advisor on 10/13/07 (Link to McDonald's original post) because of their $1.50 annual dividend payment that would occur prior to the November expiration as well as the strong fundamentals of the company. A covered calls position in MCD was established in the CCAP on 10/22/07 and the stock closed in-the-money on expiration Friday:
Transactions History:
10/22/07 Initial Stock Position -- Bought 500 MCD @ $55.94
10/22/07 Initial Call Options -- Sold 5 MCD Nov07 57.5 Calls @ $.70
11/13/07 Dividend Received -- 500 @ $1.50
11/17/07 Options Exercised -- STC 500 MCD @ $57.50
Performance Results(including commissions):
Stock Purchase Cost: $27,979.95
($55.94*500+$9.95 commission)
Net Profit:
(a) Options Income: $336.30 ($.70*500-$13.70 commission)
(b) Dividend Income: $750.00 ($1.50*500)
(c) Capital Appreciation: $760.1 [($57.50*500-$9.95)-$27,979.95]
Total Net Profit: $1,846.40 ($336.30+$750.00+$760.10)
ANNUALIZED RETURN ON INVESTMENT:
($1,846.40/$27,979.95)*(365/26) = 92.6%
2. Merck -- Closed
The 'Transactions History' below shows that MRK stock was in-the-money on Oct07 expiration Friday, but a decision was made to keep the stock and to simultaneously roll up to the 52.5s and out to the Nov07 calls. Shortly thereafter, a roll up from the Nov 52.5 to the Nov 57.5 was transacted. The stock closed in-the-money at the November expiration Friday, so the option was exercised and the stock was sold at the $57.50 option price.
Transactions History
9/7/07 Initial Stock Position -- Bought 500 MRK @ $49.97
9/7/07 Initial Call Options -- Sold 5 MRK Oct07 50 Calls @ $1.85
10/19/07 Roll Up to 52.5s and Out to Nov. -- BTC 5 MRK Oct 50s @ $3.90
10/19/07 Roll Up to 52.5s and Out to Nov. -- STO 5 MRK Nov 52.5s @ $2.40
10/26/07 Roll Up -- BTC 5 MRK Nov 52.5s @ $5.20
10/26/07 Roll Up -- STO 5 MRK Nov 57.5s @ $1.30
Note: MRK stock was trading at $57.40 when this 10/26 roll up transaction was executed.
11/17/07 Options Exercised -- STC 500 MRK @ $57.50
Performance Results(including commissions):
Stock Purchase Cost: $24,994.95
($49.97*500+$9.95 commission)
Net Profit:
(a) Options Income: -$1,843.50
Change in Options Value = 1st Options Write Income $911.30($1.85*500-$13.70 commission) minus 1st Options Buyback Cost $1,963.70($3.90*500+$13.70 commission) plus 2nd Options Write Income $1,186.30($2.40*500-$13.70) minus 2nd Options Buyback Cost $2,613.70($5.20*500+$13.70) plus 3rd Options Write Income $636.30 ($1.30*500-$13.70) = -$1,843.50 ($911.30-$1,963.70+$1,186.30-$2,613.70+$636.30)
(b) Capital Appreciation: $3,765.00 ($57.50-$49.97)*500
Total Net Profit: $1,921.50 (+$3,765.00-$1,843.50)
ANNUALIZED RETURN ON INVESTMENT:
(1,921.50/24,994.95)*(365/71 days) = 39.5%
- 2 positions closed in-the-money and the calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results were:
McDonald's -- 92.6%
Merck -- 39.5%
- 6 positions (ACN,LLY,HAL,HON,EWY,JPM) ended out-of-the-money. Decisions will be made to either sell the stock, or to keep the stock and sell calls to establish Dec07covered call positions. The related transactions will be made Monday morning and the actual transactions will be posted at that time.
Details for the two exercised positions were as follows:
1. McDonald's -- Closed
As you might recall, McDonald's was first identified as a 'Special Situation' by this advisor on 10/13/07 (Link to McDonald's original post) because of their $1.50 annual dividend payment that would occur prior to the November expiration as well as the strong fundamentals of the company. A covered calls position in MCD was established in the CCAP on 10/22/07 and the stock closed in-the-money on expiration Friday:
Transactions History:
10/22/07 Initial Stock Position -- Bought 500 MCD @ $55.94
10/22/07 Initial Call Options -- Sold 5 MCD Nov07 57.5 Calls @ $.70
11/13/07 Dividend Received -- 500 @ $1.50
11/17/07 Options Exercised -- STC 500 MCD @ $57.50
Performance Results(including commissions):
Stock Purchase Cost: $27,979.95
($55.94*500+$9.95 commission)
Net Profit:
(a) Options Income: $336.30 ($.70*500-$13.70 commission)
(b) Dividend Income: $750.00 ($1.50*500)
(c) Capital Appreciation: $760.1 [($57.50*500-$9.95)-$27,979.95]
Total Net Profit: $1,846.40 ($336.30+$750.00+$760.10)
ANNUALIZED RETURN ON INVESTMENT:
($1,846.40/$27,979.95)*(365/26) = 92.6%
2. Merck -- Closed
The 'Transactions History' below shows that MRK stock was in-the-money on Oct07 expiration Friday, but a decision was made to keep the stock and to simultaneously roll up to the 52.5s and out to the Nov07 calls. Shortly thereafter, a roll up from the Nov 52.5 to the Nov 57.5 was transacted. The stock closed in-the-money at the November expiration Friday, so the option was exercised and the stock was sold at the $57.50 option price.
Transactions History
9/7/07 Initial Stock Position -- Bought 500 MRK @ $49.97
9/7/07 Initial Call Options -- Sold 5 MRK Oct07 50 Calls @ $1.85
10/19/07 Roll Up to 52.5s and Out to Nov. -- BTC 5 MRK Oct 50s @ $3.90
10/19/07 Roll Up to 52.5s and Out to Nov. -- STO 5 MRK Nov 52.5s @ $2.40
10/26/07 Roll Up -- BTC 5 MRK Nov 52.5s @ $5.20
10/26/07 Roll Up -- STO 5 MRK Nov 57.5s @ $1.30
Note: MRK stock was trading at $57.40 when this 10/26 roll up transaction was executed.
11/17/07 Options Exercised -- STC 500 MRK @ $57.50
Performance Results(including commissions):
Stock Purchase Cost: $24,994.95
($49.97*500+$9.95 commission)
Net Profit:
(a) Options Income: -$1,843.50
Change in Options Value = 1st Options Write Income $911.30($1.85*500-$13.70 commission) minus 1st Options Buyback Cost $1,963.70($3.90*500+$13.70 commission) plus 2nd Options Write Income $1,186.30($2.40*500-$13.70) minus 2nd Options Buyback Cost $2,613.70($5.20*500+$13.70) plus 3rd Options Write Income $636.30 ($1.30*500-$13.70) = -$1,843.50 ($911.30-$1,963.70+$1,186.30-$2,613.70+$636.30)
(b) Capital Appreciation: $3,765.00 ($57.50-$49.97)*500
Total Net Profit: $1,921.50 (+$3,765.00-$1,843.50)
ANNUALIZED RETURN ON INVESTMENT:
(1,921.50/24,994.95)*(365/71 days) = 39.5%
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