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Sunday, July 22, 2012

July 2012 Expiration Results

The Covered Calls Advisor Portfolio (CCAP) contained eleven covered calls positions with July 2012 expirations. A summary of the results were as follows:

- Three positions (Hess Corp., Mylan Inc., and Valero Energy Corp.) were in-the-money just prior to expiration and the Covered Calls Advisor decided to roll-out to Aug2012 covered calls positions at the same strike prices. The roll-out transactions were posted on the blog earlier this week on the same day that these transactions occurred.

- Six positions (Goldcorp Inc., Hartford Financial Services, iShares MSCI China ETF, iShares Emerging Markets ETF, Market Vectors Russia ETF, and Morgan Stanley) expired out-of-the-money. Decisions will be made to either sell these equities, or to keep them and sell calls to establish August 2012 covered call positions. The related transactions will be made this week and the actual transactions will be posted on this blog site on the same day they occur.

- Two positions (Apple Inc. and Halliburton Corp.) were in-the-money upon Jul2012 options expiration. These equities were assigned (i.e. equities called away).

The annualized return-on-investment financial results for these closed positions is:
Apple Inc. = +25.7%
Halliburton Inc. = -3.2%

The detailed transactions history and results for these two positions are as follows:

1. Apple Inc.(AAPL) -- Closed
The transactions history is as follows:
03/19/2012 Bought 100 AAPL shares @ $593.00
03/19/2012 Sold 1 AAPL Apr2012 $620.00 Call Option @ $18.25
Note: the price of AAPL was $595.43 when this call option was sold.
04/22/2012 AAPL Apr2012 Call options expired.
04/25/2012 Sold 1 AAPL May2012 $630.00 Call at $15.50
Note: the price of AAPL was $617.60 when this call option was sold.
05/19/2012 AAPL May2012 Call options expired.
05/31/2012 Sold 1 AAPL Jun2012 $590.00 Call at $8.60
Note: the price of AAPL was $576.56 when this call option was sold.
06/15/2012 Jun2012 option expired.
06/18/2012 Sold 1 AAPL Jul2012 $590.00 Call at $10.90
Note: the price of AAPL was $574.92 when this call option was sold.
7/22/2012 Jul2012 AAPL option exercised.  Stock sold at $590.00

The performance result (including commissions) for this AAPL position was as follows: Stock Purchase Cost: $59,291.05 = ($593.00*100+$8.95 commission)

Net Profit:
(a) Options Income: +$5,337.20
= (100*($18.25+$15.50+$8.60+$10.90) - 4*$9.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $590.00 at expiration): -$291.05
= ($590.00-$593.00)*100 - $8.95 commissions

Total Net Profit (Stock assigned at $590.00): +$5,046.15
= (+$5,337.20 +$0.00 -$291.05)
Absolute Return (Stock assigned at July2012 options expiration): +8.5%
= +$5,046.15/$59,291.05
Annualized Return: +25.7%
= (+$5,046.15/$59,291.05)*(365/121 days)


2. Halliburton Inc.(HAL) -- Closed
The transactions history was as follows:
03/07/2012 Bought 300 Halliburton Co. Shares @ $34.02
03/08/2012 Sold 3 HAL Mar2012 $35.00 Calls @ $.48
Note: the price of Halliburton was $34.59 today when the calls were sold.
03/18/2012 Mar2012 options expired.
03/19/2012 Sold 3 HAL Apr2012 $35.00 Calls @ $1.18
Note: the price of HAL was $34.90 when these options were sold.
04/22/2012 HAL Apr2012 Call options expired.
04/25/2012 Sold 3 HAL May2012 $35.00 Calls at $.52
Note: the price of HAL was $33.95 when these call options were sold.
05/19/2012 HAL May2012 Call options expired.
05/31/2012 Sold 3 HAL Jun2012 $30.00 Calls at $.93
Note: the price of HAL was $30.04 when these call options were sold.
06/15/2012 Jun2012 options expired.
06/18/2012 Sold 3 HAL Jul2012 $30.00 Calls at $.72
Note: the price of HAL was $29.30 when these call options were sold.
07/22/2012 Jul2012 HAL options exercised. Stock sold at $30.00
Note: the price of HAL was $30.77 at Jul2012 options expiration.

The performance result (including commissions) for this HAL position was as follows: Stock Purchase Cost: $10,214.95 = ($34.02*300+$8.95 commission)

Net Profit:
(a) Options Income: +$1,093.00
= (300*($.48+$1.18+$.52+$.93+$.72) - 5*$11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock assigned at $30.00 at expiration): -$1,214.95
= ($30.00-$34.02)*300 - $8.95 commissions

Total Net Profit (Stock assigned at $30.00): -$121.95
= (+$1,093.00 +$0.00 -$1,214.95)
Absolute Return (Stock assigned at July2012 options expiration): -1.2%
= -$121.95/$10,214.95
Annualized Return: -3.2%
= (-$121.95/$10,214.95)*(365/137 days)