Today, shares in Best Buy Co. Inc.(BBY), iShares MSCI China ETF (FXI), Neutral Tandem Inc.(TNDM), and ProShares UltraShort 20+ Year Treasury ETF (TBT) were retained and call options were sold to establish Sept2010 covered calls positions in them. The transactions history as well as some possible results for each position are detailed below:
1. Best Buy Co Inc.(BBY) -- Continuation Transaction
The transactions history to date for Best Buy Co Inc.(BBY) is as follows:
06/23/2010 Bought 400 BBY @ $36.08
06/23/2010 Sold 4 BBY Jul2010 $37.00 Calls @ $.82
07/17/2010 Jul2010 Options Expired
Note: The closing price of BBY was $34.33 on expiration Friday.
07/22/2010 Sold 4 BBY Aug2010 $35.00 Calls @ $1.06
Note: The price of BBY was $34.68 today when this option was sold.
08/21/2010 Aug2010 Option Expired
Note: The closing price of BBY was $32.50 on expiration Friday.
09/02/2010 Sold 4 BBY Sep2010 $34.00 Call Options @ $.64
Note: The price of BBY was $33.07 today when these options were sold.
Two possible overall performance results(including commissions) for Best Buy Co Inc.(BBY) transactions would be as follows:
Stock Purchase Cost: $14,440.95
= ($36.08*400+$8.95 commission)
Net Profit:
(a) Options Income: +$972.15
= 400*($.82+$1.06+$.64) - 3*$11.95
(c) Capital Appreciation (If BBY unchanged at $33.07): -$1,212.95
= ($33.07-$36.08)*400 - $8.95 commissions
(c) Capital Appreciation (If BBY assigned at $34.00): -$840.95
= ($34.00-$36.08)*400 - $8.95 commissions
Total Net Profit(If BBY price unchanged at $33.07): -$240.80
= (+$972.15 +$0.00 -$1,212.95)
Total Net Profit(If BBY assigned at $34.00): +$131.20
= (+$972.15 +$0.00 -$840.95)
Absolute Return (If BBY unchanged at $33.07): -1.7%
= -$240.80/$14,440.95
Annualized Return If Unchanged (ARIU): -6.8%
= (-$240.80/$14,440.95)*(365/89 days)
Absolute Return if Exercised at $35.00: +0.9%
= +$131.20/$14,440.95
Annualized Return If Exercised (ARIE): +3.7%
= (+$131.20/$14,440.95)*(365/89 days)
2. iShares MSCI China ETF (FXI) -- Continuation Transaction
The transactions history to date for iShares MSCI China ETF (FXI) is as follows:
06/21/2010 Bought 1,100 FXI @ $41.85
06/21/2010 Sold 11 FXI Jul2010 $43.00 Calls @ $.71
7/17/2010 Jul2010 Options Expired
Note: The closing price of FXI was $38.74 on expiration Friday.
07/22/2010 Sold 7 FXI Aug2010 $42.00 Calls @ $.73
07/22/2010 Sold 4 FXI Aug2010 $43.00 Calls @ $.42
Note: The price of FXI was $41.02 today when these options were sold.
08/21/2010 Aug2010 Option Expired
Note: The closing price of FXI was $40.54 on expiration Friday.
09/02/2010 Sold 4 FXI Sep2010 $42.00 Call Options @ $.20
Note: The price of FXI was $40.52 today when these options were sold.
Some possible overall performance results(including commissions) for the iShares MSCI China ETF (FXI) transactions would be as follows:
Stock Purchase Cost: $46,043.95
= ($41.85*1,100+$8.95 commission)
Net Profit:
(a) Options Income: +$966.60
= (1,100*($.71+$.20) + 700*$.73 + 4008$.40 - ($17.20*2 +$14.20 +$11.95) commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If FXI unchanged at $40.52): $-1,471.95
= ($40.52-$41.85)*1,100 - $8.95 commissions
(c) Capital Appreciation (If all FXI shares are assigned with price above $42.00): +$156.05 = ($42.00-$41.85)*1,100 - $8.95 commissions
Total Net Profit(If FXI price unchanged at $40.52): -$505.35
= (+$966.60 +$0.00 -$1,471.95)
Total Net Profit(If FXI assigned at $42.00): +$1,122.65
= (+$966.60 +$0.00 +$156.05)
Absolute Return (If FXI unchanged at $40.52): -1.1%
= -$505.35/$46,043.95
Annualized Return If Unchanged (ARIU): -4.4%
= (-$505.35/$46,043.95)*(365/91 days)
Absolute Return if Exercised at $42.00: +2.4%
= +$1,122.65/$46,043.95
Annualized Return If Exercised (ARIE): +9.8%
= (+$1,122.65/$46,043.95)*(365/91 days)
3. Neutral Tandem Inc.(TNDM) -- Continuation Transaction
The transactions history to date for the Neutral Tandem Inc.(TNDM) covered calls is as follows:
07/19/2010 Bought 500 TNDM @ $11.78
07/19/2010 Sold 5 TNDM Aug2010 $12.50 Calls @ $.35
08/21/2010 Aug2010 Option Expired
Note: The closing price of TNDM was $12.09 on expiration Friday.
09/02/2010 Sold 5 TNDM Sep2010 $12.50 Call Options @ $.15
Note: The price of TNDM was $11.61 today when these options were sold.
Some possible overall performance results(including commissions) for the TNDM transactions would be as follows:
Stock Purchase Cost: $5,898.95
= ($11.78*500+$8.95 commission)
Net Profit:
(a) Options Income: +$224.60
= (500*($.35+$.15) - 2*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $11.61):
-$93.95 = ($11.61-$11.78)*500 - $8.95 commissions
(c) Capital Appreciation (If exercised at $12.50): +$351.05
= ($12.50-$11.78)*500 - $8.95 commissions
Total Net Profit(If stock price unchanged at $11.61): +$130.65
= (+$224.60 +$0.00 -$93.95)
Total Net Profit(If stock price exercised at $12.50): +$575.65
= (+$224.60 +$0.00 +$351.05)
Absolute Return if Unchanged at $11.61: +2.2%
= +$130.65/$5,898.95
Annualized Return If Unchanged (ARIU) +13.0%
= (+$130.65/$5,898.95)*(365/63 days)
Absolute Return if Exercised at $12.50: +9.8%
= +$575.65/$5,898.95
Annualized Return If Exercised (ARIE) +56.5%
= (+$575.65/$5,898.95)*(365/63 days)
4. ProShares UltraShort 20+ Year Treasury ETF -- Continuation Transaction
The transactions history to date for the ProShares UltraShort 20+ Year Treasury ETF (TBT) covered calls is as follows:
07/19/2010 Bought 300 TBT @ $35.92
07/19/2010 Sold 3 TBT Aug2010 $38.00 Calls @ $.35
08/21/2010 Aug2010 Option Expired
Note: The closing price of TBT was $31.69 on expiration Friday.
09/02/2010 Sold 3 TBT Sep2010 $33.00 Call Options @ $.55
Note: The price of TBT was $32.04 today when these options were sold.
Two possible overall performance results(including commissions) for the TBT transactions would be as follows:
Stock Purchase Cost: $10,784.95
= ($35.92*300+$8.95 commission)
Net Profit:
(a) Options Income: +$247.60
= 300*($.35+$.55) - 2*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If TBT unchanged at $32.04):
-$1,172.95 = ($32.04-$35.92)*300 - $8.95 commissions
(c) Capital Appreciation (If TBT exercised at $33.00): -$884.95
= ($33.00-$35.92)*300 - $8.95 commissions
Total Net Profit(If TBT unchanged at $32.04): -$925.35
= (+$247.60 +$0.00 -$1,172.95)
Total Net Profit(If TBT exercised at $33.00): -$637.35
= (+$247.60 +$0.00 -$884.95)
Absolute Return if Unchanged at $32.04: -8.6%
= -$925.35/$10,784.95
Annualized Return If Unchanged (ARIU) -51.3%
= (-$925.35/$10,784.95)*(365/61 days)
Absolute Return if Exercised at $33.00: -5.9%
= -$637.35/$10,784.95
Annualized Return If Exercised (ARIE) -35.4%
= (-$637.35/$10,784.95)*(365/61 days)
Thursday, September 2, 2010
Wednesday, September 1, 2010
Continuation Transaction -- Symantec Corporation
Today, shares in Symantec Corporation (SYMC) were retained and call options were sold to establish Oct2010 covered calls positions. Normally, the Covered Calls Advisor establishes near-month (in this case that would be Sep2010) covered calls. But the Sep2010 slightly-out-of-the-money $15.00 strike price call option premium was less than the minimum desired value of $.30, so the position was extended to Oct2010 expiration with a $.44 options premium received. The transactions history as well as some possible results for this SYMC position is detailed below:
1. Symantec Corporation (SYMC) -- Continuation Transaction
The transactions history to date for Symantec Corporation (SYMC) is as follows:
06/23/2010 Bought 300 SYMC @ $14.70
06/23/2010 Sold 3 SYMC Jul2010 $15.00 Call Options @ $.31
7/17/2010 Jul2010 Options Expired
Note: The closing price of SYMC was $14.59 on expiration Friday.
07/22/2010 Sold 3 SYMC Aug2010 $15.00 Calls @ $.54
Note: The price of SYMC was $14.86 today when these options were sold.
08/21/2010 Aug2010 Option Expired
Note: The closing price of SYMC was $13.80 on expiration Friday.
09/01/2010 Sold 3 SYMC Oct2010 $15.00 Call Options @ $.44
Note: The price of SYMC was $14.07 today when these options were sold.
Two possible overall performance results(including commissions) for the Symantec Corporation (SYMC) transactions would be as follows:
Stock Purchase Cost: $4,418.95
= ($14.70*300+$8.95 commission)
Net Profit:
(a) Options Income: +$353.40
= 300*($.31+$.54+$.44) - 3*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $14.07):
-$197.95 = ($14.07-$14.70)*300 - $8.95 commissions
(c) Capital Appreciation (If exercised at $15.00): +$81.05
= ($15.00-$14.70)*300 - $8.95 commissions
Total Net Profit(If stock price unchanged at $14.07): +$155.45
= (+$353.40 +$0.00 -$197.95)
Total Net Profit(If stock price exercised at $15.00): +$434.45
= (+$353.40 +$0.00 +$81.05)
Absolute Return if Unchanged at $14.07: +3.5%
= +$155.45/$4,418.95
Annualized Return If Unchanged (ARIU) +11.2%
= (+$155.45/$4,418.95)*(365/115 days)
Absolute Return if Exercised at $15.00: +9.8%
= +$434.45/$4,418.95
Annualized Return If Exercised (ARIE) +31.2%
= (+$434.45/$4,418.95)*(365/115 days)
1. Symantec Corporation (SYMC) -- Continuation Transaction
The transactions history to date for Symantec Corporation (SYMC) is as follows:
06/23/2010 Bought 300 SYMC @ $14.70
06/23/2010 Sold 3 SYMC Jul2010 $15.00 Call Options @ $.31
7/17/2010 Jul2010 Options Expired
Note: The closing price of SYMC was $14.59 on expiration Friday.
07/22/2010 Sold 3 SYMC Aug2010 $15.00 Calls @ $.54
Note: The price of SYMC was $14.86 today when these options were sold.
08/21/2010 Aug2010 Option Expired
Note: The closing price of SYMC was $13.80 on expiration Friday.
09/01/2010 Sold 3 SYMC Oct2010 $15.00 Call Options @ $.44
Note: The price of SYMC was $14.07 today when these options were sold.
Two possible overall performance results(including commissions) for the Symantec Corporation (SYMC) transactions would be as follows:
Stock Purchase Cost: $4,418.95
= ($14.70*300+$8.95 commission)
Net Profit:
(a) Options Income: +$353.40
= 300*($.31+$.54+$.44) - 3*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $14.07):
-$197.95 = ($14.07-$14.70)*300 - $8.95 commissions
(c) Capital Appreciation (If exercised at $15.00): +$81.05
= ($15.00-$14.70)*300 - $8.95 commissions
Total Net Profit(If stock price unchanged at $14.07): +$155.45
= (+$353.40 +$0.00 -$197.95)
Total Net Profit(If stock price exercised at $15.00): +$434.45
= (+$353.40 +$0.00 +$81.05)
Absolute Return if Unchanged at $14.07: +3.5%
= +$155.45/$4,418.95
Annualized Return If Unchanged (ARIU) +11.2%
= (+$155.45/$4,418.95)*(365/115 days)
Absolute Return if Exercised at $15.00: +9.8%
= +$434.45/$4,418.95
Annualized Return If Exercised (ARIE) +31.2%
= (+$434.45/$4,418.95)*(365/115 days)
Continuation Transactions -- Apple Inc., Cubist Pharmaceuticals, and Petrobras
Today, shares in Apple Inc.(AAPL), Cubist Pharmaceuticals (CBST), and Petrobras(PBR) were retained and call options were sold to establish Sept2010 covered calls positions in them. The transactions history as well as some possible results for each position are detailed below:
1. Apple Inc.(AAPL) -- Continuation Transaction
The transactions history to date for Apple Inc.(AAPL) is as follows:
02/24/2010 Bought 100 AAPL @ $198.677
02/24/2010 Sold 1 AAPL Mar2010 $210.00 Call @ $1.57
Roll-Up-and-Out Transaction:
03/19/2010 Buy-to-Close (BTC) 1 AAPL Mar2010 $210.00 @ $12.20
03/19/2010 Sell-to-Open (STO) 1 AAPL Apr2010 $230.00s @ $3.40
Note: The price of AAPL was $222.18 today when this debit-spread was transacted.
04/16/2010 Buy-to-Close (BTC) 1 AAPL Apr2010 $230.00 @ $19.00
04/16/2010 Sell-to-Open (STO) 1 AAPL May2010 $250.00 @ $9.40
Note: The price of AAPL was $248.90 today when this debit-spread was transacted.
5/22/2010 May2010 Option Expired
Note: The closing price of AAPL was $242.32 on expiration Friday
6/01/2010 Sold 1 AAPL Jun2010 $260.00 @ $9.50
Note: The price of AAPL was approximately $261.35 when this option was sold.
6/18/2010 Buy-to-Close (BTC) 1 AAPL Jun2010 $260.00 @ $13.90
6/18/2010 Sell-to-Open (STO) 1 AAPL Jul2010 $280.00 @ $7.50
Note: The price of AAPL was $273.88 today when this debit-spread was transacted.
07/17/2010 Jul2010 Option Expired
Note: The closing price of AAPL was $249.90 on expiration Friday.
07/22/2010 Sold 1 AAPL Aug2010 $270.00 Call @ $4.35
Note: The price of AAPL was $258.02 today when this option was sold.
08/21/2010 Aug2010 Option Expired
Note: The closing price of AAPL was $249.64 on expiration Friday.
09/01/2010 Sold 1 AAPL Sept2010 $270.00 Call Option @ $.68
Note: The price of AAPL was $251.35 today when this option was sold.
Two possible overall performance results(including commissions) for the Apple Inc. (AAPL) transactions would be as follows:
Stock Purchase Cost: $19,876.65
= ($198.677*100+$8.95 commission)
Net Profit:
(a) Options Income: -$937.90
= (100*($1.57-$12.20+$3.40-$19.00+$9.40+$9.50-$13.90+$7.50+$4.35+$.68) - 7*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $251.35): +$5,258.35
= ($251.35-$198.677)*100 - $8.95 commissions
(c) Capital Appreciation (If stock called away at $270.00): +$7,123.35
= ($270.00-$198.677)*100 - $8.95 commissions
Total Net Profit(If stock price unchanged at $251.35): +$4,320.45
= (-$937.90 +$0.00 +$5,258.35)
Total Net Profit(If stock price exercised at $270.00): +$6,185.45
= (-$937.90 +$0.00 +$7,123.35)
Absolute Return (If Stock unchanged at $251.35): +21.7%
= +$4,320.45/$19,876.65
Annualized Return If Exercised (ARIE) +38.5%
= (+$4,320.45/$19,876.65)*(365/206 days)
Absolute Return (If Stock exercised at $270.00): +31.1%
= +$6,185.45/$19,876.65
Annualized Return If Exercised (ARIE) +55.1%
= (+$6,185.45/$19,876.65)*(365/206 days)
2. Cubist Pharmaceuticals(CBST) -- Continuation Transaction
The transactions history to date for Cubist Pharmaceuticals(CBST) is as follows:
06/25/2010 Bought 300 CBST @ $21.31
06/25/2010 Sold 3 CBST Jul2010 $22.50 Calls @ $.50
07/17/2010 Jul2010 Options Expired
Note: The closing price of CBST was $21.37 on expiration Friday.
07/22/2010 Sold 3 CBST Aug2010 $22.50 Calls @ $.60
Note: The price of CBST was $21.24 today when this option was sold.
08/21/2010 Aug2010 Options Expired
Note: The closing price of CBST was $22.22 on expiration Friday.
09/01/2010 Sold 3 CBST Sept2010 $22.50 Call Options @ $.60
Note: The price of CBST was $22.48 today when these call options were sold.
Two possible overall performance results(including commissions) for the Cubist Pharmaceuticals(CBST) transactions would be as follows:
Stock Purchase Cost: $6,401.95
= ($21.31*300+$8.95 commission)
Net Profit:
(a) Options Income: +$476.40
= (300*($.50+$.60+$.60) - 3*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $22.48):
+$342.05 = ($22.48-$21.31)*300 - $8.95 commissions
(c) Capital Appreciation (If exercised at $22.50): +$348.05
= ($22.50-$21.31)*300 - $8.95 commissions
Total Net Profit(If stock price unchanged at $22.48): +$818.45
= (+$476.40 +$0.00 +$342.05)
Total Net Profit(If stock price exercised at $22.50): +$824.45
= (+$476.40 +$0.00 +$348.05)
Absolute Return if Unchanged at $22.48: +12.8%
= +$818.45/$6,401.95
Annualized Return If Unchanged (ARIU) +54.9%
= (+$818.45/$6,401.95)*(365/85 days)
Absolute Return if Exercised at $22.50: +12.9%
= +$824.45/$6,401.95
Annualized Return If Exercised (ARIE) +55.3%
= (+$824.45/$6,401.95)*(365/85 days)
3. Petrobras (PBR) -- Continuation Transaction
The transactions history to date for Petrobras (PBR) is as follows:
06/21/2010 Bought 300 PBR @ $39.34
06/21/2010 Sold 3 PBR Jul2010 $40.00 Calls @ $1.05
7/17/2010 Jul2010 Options Expired
Note: The closing price of PBR was $34.51 on expiration Friday.
07/22/2010 Sold 3 PBR Aug2010 $38.00 Calls @ $.55
Note: The price of PBR was $36.52 today when these options were sold.
08/21/2010 Aug2010 Options Expired
Note: The closing price of PBR was $34.42 on expiration Friday.
09/01/2010 Sold 3 PBR Sept2010 $36.00 Call Options @ $.58
Note: The price of PBR was $35.20 today when these call options were sold.
Two possible overall performance results(including commissions) for the Petrobras (PBR) transactions would be as follows:
Stock Purchase Cost: $11,810.95
= ($39.34*300+$8.95 commission)
Net Profit:
(a) Options Income: +$620.40
= (300*($1.05+$.55+$.58) - 3*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If PBR unchanged at $35.20): $-1,250.95
= ($35.20-$39.34)*300 - $8.95 commissions
(c) Capital Appreciation (If PBR assigned at $36.00): -$1,010.95
= ($36.00-$39.34)*300 - $8.95 commissions
Total Net Profit(If PBR price unchanged at $35.20): -$630.55
= (+$620.40 +$0.00 -$1,250.95)
Total Net Profit(If PBR assigned at $36.00): -$390.55
= (+$620.40 +$0.00 -$1,010.95)
Absolute Return (If PBR unchanged at $35.20): -5.3%
= -$630.55/$11,810.95
Annualized Return If Unchanged (ARIU): -21.9%
= (-$630.55/$11,810.95)*(365/89 days)
Absolute Return if Exercised at $36.00: -3.3%
= -$390.55/$11,810.95
Annualized Return If Exercised (ARIE): -13.6%
= (-$390.55/$11,810.95)*(365/89 days)
1. Apple Inc.(AAPL) -- Continuation Transaction
The transactions history to date for Apple Inc.(AAPL) is as follows:
02/24/2010 Bought 100 AAPL @ $198.677
02/24/2010 Sold 1 AAPL Mar2010 $210.00 Call @ $1.57
Roll-Up-and-Out Transaction:
03/19/2010 Buy-to-Close (BTC) 1 AAPL Mar2010 $210.00 @ $12.20
03/19/2010 Sell-to-Open (STO) 1 AAPL Apr2010 $230.00s @ $3.40
Note: The price of AAPL was $222.18 today when this debit-spread was transacted.
04/16/2010 Buy-to-Close (BTC) 1 AAPL Apr2010 $230.00 @ $19.00
04/16/2010 Sell-to-Open (STO) 1 AAPL May2010 $250.00 @ $9.40
Note: The price of AAPL was $248.90 today when this debit-spread was transacted.
5/22/2010 May2010 Option Expired
Note: The closing price of AAPL was $242.32 on expiration Friday
6/01/2010 Sold 1 AAPL Jun2010 $260.00 @ $9.50
Note: The price of AAPL was approximately $261.35 when this option was sold.
6/18/2010 Buy-to-Close (BTC) 1 AAPL Jun2010 $260.00 @ $13.90
6/18/2010 Sell-to-Open (STO) 1 AAPL Jul2010 $280.00 @ $7.50
Note: The price of AAPL was $273.88 today when this debit-spread was transacted.
07/17/2010 Jul2010 Option Expired
Note: The closing price of AAPL was $249.90 on expiration Friday.
07/22/2010 Sold 1 AAPL Aug2010 $270.00 Call @ $4.35
Note: The price of AAPL was $258.02 today when this option was sold.
08/21/2010 Aug2010 Option Expired
Note: The closing price of AAPL was $249.64 on expiration Friday.
09/01/2010 Sold 1 AAPL Sept2010 $270.00 Call Option @ $.68
Note: The price of AAPL was $251.35 today when this option was sold.
Two possible overall performance results(including commissions) for the Apple Inc. (AAPL) transactions would be as follows:
Stock Purchase Cost: $19,876.65
= ($198.677*100+$8.95 commission)
Net Profit:
(a) Options Income: -$937.90
= (100*($1.57-$12.20+$3.40-$19.00+$9.40+$9.50-$13.90+$7.50+$4.35+$.68) - 7*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $251.35): +$5,258.35
= ($251.35-$198.677)*100 - $8.95 commissions
(c) Capital Appreciation (If stock called away at $270.00): +$7,123.35
= ($270.00-$198.677)*100 - $8.95 commissions
Total Net Profit(If stock price unchanged at $251.35): +$4,320.45
= (-$937.90 +$0.00 +$5,258.35)
Total Net Profit(If stock price exercised at $270.00): +$6,185.45
= (-$937.90 +$0.00 +$7,123.35)
Absolute Return (If Stock unchanged at $251.35): +21.7%
= +$4,320.45/$19,876.65
Annualized Return If Exercised (ARIE) +38.5%
= (+$4,320.45/$19,876.65)*(365/206 days)
Absolute Return (If Stock exercised at $270.00): +31.1%
= +$6,185.45/$19,876.65
Annualized Return If Exercised (ARIE) +55.1%
= (+$6,185.45/$19,876.65)*(365/206 days)
2. Cubist Pharmaceuticals(CBST) -- Continuation Transaction
The transactions history to date for Cubist Pharmaceuticals(CBST) is as follows:
06/25/2010 Bought 300 CBST @ $21.31
06/25/2010 Sold 3 CBST Jul2010 $22.50 Calls @ $.50
07/17/2010 Jul2010 Options Expired
Note: The closing price of CBST was $21.37 on expiration Friday.
07/22/2010 Sold 3 CBST Aug2010 $22.50 Calls @ $.60
Note: The price of CBST was $21.24 today when this option was sold.
08/21/2010 Aug2010 Options Expired
Note: The closing price of CBST was $22.22 on expiration Friday.
09/01/2010 Sold 3 CBST Sept2010 $22.50 Call Options @ $.60
Note: The price of CBST was $22.48 today when these call options were sold.
Two possible overall performance results(including commissions) for the Cubist Pharmaceuticals(CBST) transactions would be as follows:
Stock Purchase Cost: $6,401.95
= ($21.31*300+$8.95 commission)
Net Profit:
(a) Options Income: +$476.40
= (300*($.50+$.60+$.60) - 3*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $22.48):
+$342.05 = ($22.48-$21.31)*300 - $8.95 commissions
(c) Capital Appreciation (If exercised at $22.50): +$348.05
= ($22.50-$21.31)*300 - $8.95 commissions
Total Net Profit(If stock price unchanged at $22.48): +$818.45
= (+$476.40 +$0.00 +$342.05)
Total Net Profit(If stock price exercised at $22.50): +$824.45
= (+$476.40 +$0.00 +$348.05)
Absolute Return if Unchanged at $22.48: +12.8%
= +$818.45/$6,401.95
Annualized Return If Unchanged (ARIU) +54.9%
= (+$818.45/$6,401.95)*(365/85 days)
Absolute Return if Exercised at $22.50: +12.9%
= +$824.45/$6,401.95
Annualized Return If Exercised (ARIE) +55.3%
= (+$824.45/$6,401.95)*(365/85 days)
3. Petrobras (PBR) -- Continuation Transaction
The transactions history to date for Petrobras (PBR) is as follows:
06/21/2010 Bought 300 PBR @ $39.34
06/21/2010 Sold 3 PBR Jul2010 $40.00 Calls @ $1.05
7/17/2010 Jul2010 Options Expired
Note: The closing price of PBR was $34.51 on expiration Friday.
07/22/2010 Sold 3 PBR Aug2010 $38.00 Calls @ $.55
Note: The price of PBR was $36.52 today when these options were sold.
08/21/2010 Aug2010 Options Expired
Note: The closing price of PBR was $34.42 on expiration Friday.
09/01/2010 Sold 3 PBR Sept2010 $36.00 Call Options @ $.58
Note: The price of PBR was $35.20 today when these call options were sold.
Two possible overall performance results(including commissions) for the Petrobras (PBR) transactions would be as follows:
Stock Purchase Cost: $11,810.95
= ($39.34*300+$8.95 commission)
Net Profit:
(a) Options Income: +$620.40
= (300*($1.05+$.55+$.58) - 3*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If PBR unchanged at $35.20): $-1,250.95
= ($35.20-$39.34)*300 - $8.95 commissions
(c) Capital Appreciation (If PBR assigned at $36.00): -$1,010.95
= ($36.00-$39.34)*300 - $8.95 commissions
Total Net Profit(If PBR price unchanged at $35.20): -$630.55
= (+$620.40 +$0.00 -$1,250.95)
Total Net Profit(If PBR assigned at $36.00): -$390.55
= (+$620.40 +$0.00 -$1,010.95)
Absolute Return (If PBR unchanged at $35.20): -5.3%
= -$630.55/$11,810.95
Annualized Return If Unchanged (ARIU): -21.9%
= (-$630.55/$11,810.95)*(365/89 days)
Absolute Return if Exercised at $36.00: -3.3%
= -$390.55/$11,810.95
Annualized Return If Exercised (ARIE): -13.6%
= (-$390.55/$11,810.95)*(365/89 days)
Returns -- Through August 2010
1. August 2010 Year-to-Date Results:
As shown in the table below, the Covered Calls Advisor Portfolio (CCAP) has underperformed the Russell 3000 benchmark by 4.81 percentage points [-9.94%-(-5.13%)] so far in 2010:
.jpg)
CCAP Absolute Return (Jan 1st through August 31st, 2010) = -9.94%
($248,110.65-$275,491.90)/$275,491.90
Benchmark Russell 3000(IWV) Absolute Return(Jan 1st through August 31st, 2010) =
-5.13%
($61.93-$65.28)/$65.28
2. Prior Years Results:
The Covered Calls Advisor Portfolio (CCAP) began in September, 2007. The annualized returns achieved for 2007, 2008, and 2009 compared with the Russell 3000 benchmark results were as follows:
The Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent. Here's an example to aid understanding of how the overall portfolio performance is determined:
If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100.
As shown in the right sidebar near the top of this page, the Covered Calls Advisor's current Overall Market Meter rating remains "SLIGHTLY BULLISH". The corresponding investing strategy is to, on-average, sell 2% out-of-the-money covered calls for the nearest expiration month.
If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.
Regards and Godspeed,
Jeff
As shown in the table below, the Covered Calls Advisor Portfolio (CCAP) has underperformed the Russell 3000 benchmark by 4.81 percentage points [-9.94%-(-5.13%)] so far in 2010:
.jpg)
CCAP Absolute Return (Jan 1st through August 31st, 2010) = -9.94%
($248,110.65-$275,491.90)/$275,491.90
Benchmark Russell 3000(IWV) Absolute Return(Jan 1st through August 31st, 2010) =
-5.13%
($61.93-$65.28)/$65.28
2. Prior Years Results:
The Covered Calls Advisor Portfolio (CCAP) began in September, 2007. The annualized returns achieved for 2007, 2008, and 2009 compared with the Russell 3000 benchmark results were as follows:
The Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent. Here's an example to aid understanding of how the overall portfolio performance is determined:
If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100.
As shown in the right sidebar near the top of this page, the Covered Calls Advisor's current Overall Market Meter rating remains "SLIGHTLY BULLISH". The corresponding investing strategy is to, on-average, sell 2% out-of-the-money covered calls for the nearest expiration month.
If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.
Regards and Godspeed,
Jeff
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