Established Covered Calls Position in Kinder Morgan Inc.

Today, a new covered calls position was established in Kinder Morgan Inc. (ticker symbol KMI).  Three hundred shares of KMI were purchased at $23.95 and three in-the-money Dec2015 Call options were simultaneously sold at the $22.50 strike price for $1.80 each.

Kinder Morgan is the largest energy transportation company in the oil and gas midstream industry.  Share prices in midstream companies have been crushed recently.  The Covered Calls Advisor believes that KMI is a terrific bargain at the $22.50 strike price given the huge dividend yield at that price level.

As shown below, this investment will provide a +1.2% absolute return in 22 days (which is equivalent to a +20.0% annualized return) if KMI remains above the $22.50 strike price on the December 18th options expiration date.

This potential return-on-investment result is attractive to us option sellers given this relatively conservative investment -- there is 6.1% downside protection (from the current $23.95 stock price to the $22.50 strike price).  The implied volatility in the options was approximately 43 when this position was established and there are no quarterly earnings or distributions prior to the December options expiration date. 

The details of the associated transactions and a potential return-on-investment result are as follows:

1. Kinder Morgan Inc. (KMI)
The transactions were as follows:
11/27/2015 Bought 300 Kinder Morgan shares @ $23.95
11/27/2015 Sold 3 KMI Dec2015 $22.50 Call Options @ $1.80

A possible overall performance result (including commissions) for these Kinder Morgan Inc. covered calls is as follows:
Stock Purchase Cost: $7,192.95
= ($23.95*300+$7.95 commission)

Net Profit:
(a) Options Income: +$529.80
= 300*$1.80 - $10.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If KMI assigned at $22.50) = -$442.95
= ($22.50-$23.95)*300 - $7.95 commissions

Total Net Profit (If KMI assigned at $22.50): +$86.85
= (+$529.80 +$0.00 -$442.95)

Absolute Return if Assigned (at $22.50 strike price): +1.2%
= +$86.85/$7,192.95
Annualized Return If Assigned (ARIA): +20.0%
= (+$86.85/$7,192.95)*(365/22 days)

The downside 'breakeven price' at expiration is at $22.15 ($23.95 - $1.80), which is 7.5% below the current market price of $23.95.

Using the Black-Scholes Options Pricing Model in the Schwab Hypothetical Options Pricing calculator, the resulting probability of making a profit (if held until Dec2015 options expiration) for this Kinder Morgan covered calls position is 72%. This compares with a probability of profit of 50.4% for a buy-and-hold of KMI stock over the same time period. Using this probability of profit of 72%, the Expected Value annualized ROI of this investment (if held until expiration) is +14.4% (+22.8% * 72%).

The 'crossover price' at expiration is $25.75 ($23.95 + $1.80). This is the price above which it would have been more profitable to simply buy-and-hold Kinder Morgan stock until Decmber 18th (the Dec2015 options expiration date) rather than establish this covered calls position.

Established Four New Positions

Today, positions were established in Avis Budget Group Inc. (ticker symbol CAR), Goldman Sachs Group Inc. (GS), Nationstar Mortgage Holdings Inc. (NSM), and Polaris Industries Inc. (PII).  All positions were established for the December 2015 options expiration.  Goldman Sachs and Polaris Industries both have ex-dividends in the upcoming week, so covered call positions were established to most likely enable those dividends to be captured.  For the other two positions, Avis Budget Group and Nationstar Mortgage, 100% cash-secured Put options were sold.  Given the Covered Calls Advisor's current Slightly Bearish overall market outlook, conservative investments were made for each of the four positions with the strike prices below the current stock prices.

The potential returns are:
1. Avis Budget Group Inc.: +2.6% absolute return in 25 days (which is equivalent to a +37.5% annualized return-on-investment) if CAR stock closes above the $37.50 strike price on the Dec2015 options expiration date.  
2. Goldman Sachs Group Inc.: +1.2% absolute return in 25 days (equivalent to a +16.8% annualized return-on-investment)
3. Nationstar Mortgage Holdings Inc.:  +3.1% absolute return in 25 days (equivalent to a +45.0% annualized return-on-investment)
4. Polaris Industries Inc.: +1.7% absolute return in 25 days (equivalent to a +24.5% annualized return-on-investment)
Note: the Implied Volatility of the options at the time they were sold (for these four positions) ranged between 23 and 51, so each option exceeded the Covered Calls Advisor's minimum threshold of 20 and thus provides a sufficiently attractive return-on-investment potential relative to the conservative risk profile of each position.  

The transactions and potential return-on-investment results for each position are detailed below.

1. Avis Budget Group Inc. (CAR) -- New 100% Cash-Secured Puts Position
The transaction was as follows:

11/24/2015  Sold 3 CAR Dec2015 $37.50 100% cash-secured Put options @ $1.00
Note: the price of CAR was $38.95 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 Put options sold.

A possible overall performance result (including commissions) would be as follows:
100% Cash-Secured Cost Basis: $11,250.00
= $37.50*300
Note: the price of CAR was $38.95 when these options were sold

Net Profit:
(a) Options Income: +$288.80
= ($1.00*300 shares) - $11.20 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If CAR is above $37.50 strike price at Dec2015 expiration): +$0.00
= ($37.50-$37.50)*300 shares

Total Net Profit (If CAR is above $37.50 strike price at Dec2015 options expiration): +$288.80
= (+$288.80 options income +$0.00 dividend income +$0.00 capital appreciation)

Absolute Return (If CAR is above $37.50 strike price at Dec2015 options expiration): +2.6%
= +$288.80/$11,250.00
Annualized Return: +37.5%
= (+$288.80/$11,250.00)*(365/25 days)

The downside 'breakeven price' at expiration is at $36.50 ($37.50 - $1.00), which is 6.3% below the current market price of $38.95.
The 'crossover price' at expiration is $39.95 ($38.95 + $1.00).  This is the price above which it would have been more profitable to simply buy-and-hold CAR until Dec 18th (the Dec2015 options expiration date) rather than selling these Put options.


2. Goldman Sachs Group Inc. (GS) -- New Covered Call Position
A $.65 quarterly dividend goes ex-dividend on November 30th.  Although very unlikely, if the current time value (i.e. extrinsic value) of $1.69 [$8.75 option premium - ($187.06 stock price - $180.00 strike price)] remaining in the short call option decays below the $.65 dividend amount by November 27th (this Friday -- the business day prior to the ex-div date), then there is a possibility (although very unlikely) that the call option owner would exercise early and call the stock away to capture the dividend.

As shown below, two potential return-on-investment results for this position are:

If Early Assignment: +0.8% absolute return (equivalent to +97.7% annualized return for the next 3 days) if the stock is assigned early (business day prior to Nov 30th ex-div date); OR

If Dividend Capture: +1.2% absolute return (equivalent to +16.8% annualized return over the next 25 days) if the stock is assigned at Dec2015 expiration on December 18th.

11/24/2015 Bought 100 GS shares @ $187.06
11/24/2015 Sold 1 GS Dec2015 $180.00 Call option @ $8.75
Note: the price of GS was $187.21 when the option was sold
11/30/2015 Upcoming ex-dividend of $.65 per share

Two possible overall performance results (including commissions) for this Goldman Sachs covered call position are as follows:
Stock Purchase Cost: $18,714.95
= ($187.06*100+$8.95 commission)

Net Profit:
(a) Options Income: +$865.30
= ($8.75*100 shares) - $9.70 commissions
(b) Dividend Income (If option exercised early on business day prior to Nov 30th ex-div date): +$0.00; or
(b) Dividend Income (If stock assigned at Dec2015 expiration): +$65.00
= ($.65 dividend per share x 100 shares)

(c) Capital Appreciation (If stock assigned early on Nov 27th): -$714.95
+($180.00-$187.06)*100 - $8.95 commissions; or
(c) Capital Appreciation (If stock assigned at $180.00 at Dec2015 expiration): -$714.95
+($180.00-$187.06)*100 - $8.95 commissions

Total Net Profit (If option exercised on day prior to Nov 30th ex-div date): +$150.35

= (+$865.30 +$0.00 -$714.95); or

Total Net Profit (If stock assigned at $180.00 at Dec2015 expiration): +$215.35

= (+$865.30 +$65.00 -$714.95)

1. Absolute Return [If option exercised this Friday (business day prior to ex-div date)]: +0.8%

= +$150.35/$18,714.95

Annualized Return (If option exercised early): +97.7%

= (+$150.35/$18,714.95)*(365/3 days); OR

2. Absolute Return (If stock assigned at $180.00 at Dec2015 expiration): +1.2%

= +$215.35/$18,714.95

Annualized Return: +16.8%

= (+$215.35/$18,714.95)*(365/25 days)

As is often the case, early assignment provides a higher annualized return, so this is the Covered Calls Advisor's preferred outcome; but either outcome would provide an attractive return-on-investment.  These returns will be achieved as long as the stock is above the $180.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $178.31 ($187.06 -$8.75) provides a substantial 5.0% downside protection from today's purchase price.


3. Nationstar Mortgage Holdings Inc. (NSM) -- New 100% Cash-Secured Puts Position
The transaction was as follows:
11/24/2015  Sold 4 NSM Dec2015 $12.00 100% cash-secured Put options @ $.40
Note: the price of NSM was $12.89 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 Put options sold.

A possible overall performance result (including commissions) would be as follows:
100% Cash-Secured Cost Basis: $4,800.00
= $12.00*400
Note: the price of NSM was $12.89 when these options were sold

Net Profit:
(a) Options Income: +$148.05
= ($.40*400 shares) - $11.95 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If NSM is above $12.00 strike price at Dec2015 expiration): +$0.00
= ($12.00-$12.00)*400 shares

Total Net Profit (If NSM is above $12.00 strike price at Dec2015 options expiration): +$148.05
= (+$148.05 options income +$0.00 dividend income +$0.00 capital appreciation)

Absolute Return (If NSM is above $12.00 strike price at Dec2015 options expiration): +3.1%
= +$148.05/$4,800.00
Annualized Return: +45.0%
= (+$148.05/$4,800.00)*(365/25 days)

The downside 'breakeven price' at expiration is at $11.60 ($12.00 - $.40), which is 10.0% below the current market price of $12.89.
Using the Black-Scholes Options Pricing Model in the Schwab Hypothetical Options Pricing Calculator, the probability of making a profit (if held until the Dec 18th, 2015 options expiration) for this Nationstar Mortgage short Puts position is 71%. This compares with a probability of profit of 50.3% for a buy-and-hold of Nationstar stock over the same time period. Using this probability of profit of 71%, the expected value annualized return-on-investment (if held until expiration) is +31.9% (+45.0% * 71%).
The 'crossover price' at expiration is $13.29 ($12.89 + $.40).  This is the price above which it would have been more profitable to simply buy-and-hold NSM until Dec 18th (the Dec2015 options expiration date) rather than selling these Put options.


4. Polaris Industries Inc. (PII) -- New Covered Call Position

A $.53 quarterly dividend goes ex-dividend on November 27th (this Friday).  Including this dividend, the potential absolute return for this investment is +1.7% (equivalent to +24.5% annualized return over the next 25 days) if the stock is assigned at the Dec2015 options expiration on December 18th.

11/24/2015 Bought 100 PII shares @ $103.92
11/24/2015 Sold 1 PII Dec2015 $100.00 Call option @ $5.32
11/27/2015 Upcoming ex-dividend of $.53 per share

A possible overall performance result (including commissions) for this Polaris covered call position is as follows:
Stock Purchase Cost: $10,400.95
= ($103.92*100+$8.95 commission)

Net Profit:
(a) Options Income: +$522.30
= ($5.32*100 shares) - $9.70 commissions
(b) Dividend Income (If stock assigned at Dec2015 expiration): +$53.00
= ($.53 dividend per share x 100 shares)

(c) Capital Appreciation (If stock assigned at $100.00 strike price at Dec2015 expiration): -$400.95
+($100.00-$103.92)*100 - $8.95 commissions

Total Net Profit (If stock assigned at $100.00 at Dec2015 expiration): +$174.35

= (+$522.30 +$53.00 -$400.95)

Absolute Return (If stock assigned at $100.00 at Dec2015 expiration): +1.7%

= +$174.35/$10,400.95

Annualized Return: +24.5%

= (+$174.35/$10,400.95)*(365/25 days)

If the stock declines below the strike price, the breakeven price of $98.07 ($103.92 -$5.32 -$.53) provides a substantial 5.6% downside protection from today's purchase price.

Cummins Inc. Position Closed

The Nov2015 covered calls position in Cummins Inc.(ticker CMI) expired upon last Friday's options expiration. Of the seven positions in the Covered Calls Advisor Portfolio with Nov2015 expirations, Cummins was the only one that expired out-of-the-money. Today, the Covered Calls Advisor decided to sell the 200 long shares of CMI. The results of these transactions are detailed below.

1. Cummins Inc. (CMI)- Position Closed
11/09/2015 Bought 200 CMI shares @ $103.97
11/09/2015 Sold 2 CMI Nov2015 $102.00 Call options @ $3.12
11/18/2015 Ex-dividend of $.975 per share
11/20/2015 2 CMI Nov2015 $102 Call options expired
Note: price of CMI was $98.70 upon Nov2015 options expiration
11/23/2015 Sold 200 CMI shares @ $99.27

The overall performance result (including commissions) for this Cummins (CMI) covered calls position was as follows:
Stock Purchase Cost: $20,802.95
= ($103.97*200+$8.95 commission)

Net Profit:
(a) Options Income: +$613.55
= ($3.12*200 shares) - $10.45 commissions

(b) Dividend Income: +$195.00
= ($.975 dividend per share x 200 shares)

(c) Capital Appreciation (Stock sold at $99.27): -$948.95
+($99.27 - $103.97)*200 - $8.95 commissions

Total Net Profit: -$140.40

= (+$613.55 +$195.00 -$948.95)

Absolute Return (If stock assigned at $102.00 at Nov2015 expiration): -0.7%

= -$140.40/$20,802.95

Annualized Return (If stock assigned): -17.6%

= (-$140.40/$20,802.95)*(365/14 days)

November 2015 Option Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained seven positions with November 2015 expirations.  The results are as follows:

- 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)

The transactions history and results for each of these positions is detailed below. The cash available from the closing of these positions will be retained in the Covered Calls Advisor Portfolio until new covered calls and/or 100% cash-secured puts positions are established.  Any new positions will be posted on this site on the same day they are established.

- 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

The transactions were as follows:
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 Closed
The 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)

4. Time Warner Inc. (TWX) -- Position Closed
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

The transactions were as follows:
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)