- Six of the seven positions (Capital One Financial Corporation, iShares China Large-Cap ETF, Micron Technology Inc., Time Warner Inc., and two positions in United Continental Holdings Inc.) were closed out at expiration. This was the optimal outcome for these positions in that the maximum potential return-on-investment (ROI) results were achieved for these positions. The results for these closed positions are:
- Capital One Financial Corporation = +0.8% absolute return (equivalent to +36.8% annualized return for the 8 days holding period)
- iShares China Large-Cap ETF = +4.3% absolute return (equivalent to +16.6% annualized return for the 95 days holding period)
- Micron Technology Inc. = +2.9% absolute return (equivalent to +131.3% annualized return for the 8 days holding period)
- Time Warner Inc. = +1.6% absolute return (equivalent to +47.9% annualized return for the 12 days holding period)
- United Continental Holdings Inc. (UAL position #1) = +6.0% absolute return (equivalent to +36.9% annualized return for the 59 days holding period)
- United Continental Holdings Inc. (UAL position #2) = +3.4% absolute return (equivalent to +34.3% annualized return for the 36 days holding period)
- One of the seven positions (Cummins Inc.) ended at expiration with the price of the stock below the strike price, so the options expired and the long shares are now retained in the Covered Calls Advisor Portfolio. A decision will be made soon to either sell these shares or to establish a covered calls position by selling future Call options against the current long stock holding. When this decision is made and the accompanying transaction is completed, a post will be made on this blog on the same day along with the detailed transactions to-date.
Details of the six closed positions summarized above and the associated return-on-investment results are as follows:
1. Capital One Financial Corporation (COF) -- Position Closed
The transactions were as follows: 11/13/2015 Sold 3 COF 100% cash-secured $76.00 Put options @ $.65
Note: the price of COF was $77.12 today when this transaction was executed.
11/20/2015 3 Capital One Nov2015 $76.00 Puts expired
Note: the price of COF was $79.46 upon Nov2015 options expiration
The Covered Calls Advisor does not use margin, so the detailed information on this position and a potential result shown below reflect the fact that this position was established using 100% cash securitization for the three Put options sold.
The overall performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $22,800.00
= $76.00*300
Net Profit:
(a) Options Income: +$183.80
= ($.65*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (COF was above $76.00 strike price at Nov2015 expiration): +$0.00
= ($76.00-$76.00)*300 shares
Total Net Profit (COF was above $76.00 strike price at Nov2015 options expiration): +$183.80
= (+$183.80 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +0.8%
= +$183.80/$22,800.00
Annualized Return: +36.8%
= (+$183.80/$22,800.00)*(365/8 days)
2. iShares China Large-Cap ETF (FXI) -- Position Closed
08/17/2015 Sold 3 iShares China Large-Cap ETF Sep2015 $38.50 Puts @ $.77
Note 1: The price of FXI was $39.75 when this transaction was executed.
Note 2: The Covered Calls Advisor does not use margin, so the detailed information on this position and a potential result shown below reflect the fact that this position was established using 100% cash securitization for the three Put options sold.
09/18/2015 3 FXI Sep2015 Put options exercised and 300 shares of FXI purchased at $38.50 strike price
Note: the price of FXI was $36.32 upon Sep2015 options expiration
09/21/2015 Sold 3 FXI $38.00 Oct2015 Call options @ $.73
Note: the price of FXI was $36.91 when this transaction was made.
Roll Out on 10/16/2015:
Bought-to-Close 3 FXI $38.00 Oct2015 Call options @ $1.70
and simultaneously
Sold-to-Open 3 FXI $38.00 Nov2015 Call options @ $2.48
Note: the price of FXI was $39.69 when this roll out transaction was executed, so there was only $.01 [$1.70 - ($39.69 - $38.00)] of time value remaining in the Oct2015 Call options when this roll out transaction occurred.
11/20/2015 3 FXI Call options assigned, so the 300 shares of iShares China Large-Cap ETF were sold at the $38.00 strike price
Note: the price of FXI was $38.47 upon the Nov2015 options expiration
The overall performance result (including commissions) for these transactions was as follows:
100% Cash-Secured Cost Basis: $11,550.00
= $38.50*300
Net Profit:
(a) Options Income: +$650.40
= ($.77+$.73-$1.70+$2.48) *300 shares - 3*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (FXI was above $38.00 strike price at Nov2015 expiration): -$150.00
= ($38.00-$38.50)*300 shares
Total Net Profit (FXI was above $38.00 strike price upon the Nov2015 options expiration): +$500.40
= (+$650.40 options income +$0.00 dividend income -$150.00 capital appreciation)
Absolute Return achieved: +4.3%
= +$500.40/$11,550.00
Annualized Return: +16.6%
= (+$500.40/$11,550.00)*(365/95 days)
3. Micron Technology Inc. (MU) -- Position ClosedThe transactions were as follows:
11/13//2015 Sold 3 MU 100% cash-secured $15.00 Put options @ $.47
Note: The price of MU was $14.92 when this transaction was executed.
11/20/2015 3 Micron Technology Nov2015 $15.00 Puts expired
Note: the price of MU was $15.43 upon Nov2015 options expiration
The Covered Calls Advisor does not use margin, so the detailed information on this position and some potential results shown below reflect the fact that this position was established using 100% cash securitization for the three Put options sold.
The performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $4,508.95
= $15.00*300 + $8.95
Net Profit:
(a) Options Income: +$129.80
= ($.47*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (MU was above $15.00 strike price at Nov2015 expiration): +$0.00
= ($17.00-$17.00)*300 shares
Total Net Profit (MU was above $15.00 strike price at Nov2015 options expiration): +$129.80
= (+$129.80 +$0.00 +$0.00)
Absolute Return: +2.9%
= +$129.80/$4,508.95
Annualized Return: +131.3%
= (+$129.80/$4,508.95)*(365/8 days)
The transactions were as follows:
11/09/2015 Sold 3 TWX 100% cash-secured $67.50 Put options @ $1.10
Note: the price of TWX was $68.74 today when this transaction was executed.
11/20/2015 3 Time Warner Inc. Nov2015 $67.50 Puts expired
Note: the price of TWX was $70.72 upon Nov2015 options expiration
The overall performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $20,250.00
= $67.50*300
Net Profit:
(a) Options Income: +$318.80
= ($1.10*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (TWX was above $67.50 strike price at Nov2015 expiration): +$0.00
= ($67.50-$67.50)*300 shares
Total Net Profit (TWX was above $67.50 strike price at Nov2015 options expiration): +$318.80
= (+$318.80 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +1.6%
= +$318.80/$20,250.00
Annualized Return: +47.9%
= (+$318.80/$20,250.00)*(365/12 days)
5. United Continental Holdings Inc. (UAL) -- 1st UAL Position Closed
09/22/2015 Sold 3 UAL Oct2015 $57.50 100% cash-secured Put options @ $1.30
Note: the price of UAL was $59.56 today when this transaction was executed. The Covered Calls Advisor does not use margin, so the detailed information on this position and a potential result shown below reflect the fact that this position was established using 100% cash securitization for the three Put options sold.
10/16/2015 3 Put options expired with the stock price below the strike price, so 300 shares of UAL were purchased at the $57.50 strike price.
Note: the price of UAL was $55.97 upon options expiration
10/192015 Sold-to-Open 3 UAL Nov2015 $57.50 Call options @ $2.20
Note: the price of UAL was $56.55 when these options were sold
11/20/2015 3 United Continental Nov2015 $57.50 Puts expired
Note: the price of UAL was $58.81 upon Nov2015 options expiration
The overall performance result (including commissions) for this UAL position was as follows:
100% Cash-Secured Cost Basis: $17,250.00
= $57.50*300
Net Profit:
(a) Options Income: +$1,027.60 = ($1.30 + $2.20)*300 shares) - 2*$11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (UAL was above $57.50 strike price at Nov2015 expiration): +$0.00
= ($57.50-$57.50)*300 shares
Total Net Profit (UAL was above $57.50 strike price at Nov2015 options expiration): +$1,027.60= (+$1,027.60 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +6.0%= +$1,027.60/$17,250.00
Annualized Return: +36.9%
= (+$1,027.60/$17,250.00)*(365/59 days)
6. United Continental Holdings Inc. (UAL) -- 2nd UAL Position Closed
The transactions were as follows: 10/16/2015 Sold 3 UAL 100% cash-secured $55.00 Put options @ $1.90
Note: the price of UAL was $56.67 today when this transaction was executed.
11/20/2015 3 United Continental Nov2015 $55.00 Puts expired
Note: the price of UAL was $58.81 upon Nov2015 options expiration
The overall performance result (including commissions) was as follows:
100% Cash-Secured Cost Basis: $16,500.00
= $55.00*300
Net Profit:
(a) Options Income: +$558.80
= ($1.90*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (UAL was above $55.00 strike price at Nov2015 expiration): +$0.00
= ($55.00-$55.00)*300 shares
Total Net Profit (UAL was above $55.00 strike price at Nov2015 options expiration): +$558.80
= (+$558.80 options income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return: +3.4%
= +$558.80/$16,500.00
Annualized Return: +34.3%
= (+$558.80/$16,500.00)*(365/36 days)
