Today, the covered calls position in Agnico Eagle Mines Ltd. (ticker symbol AEM) was continued by selling three Jan2015 $27.50 strike price Call options. The transactions to date for this AEM position and two possible resulting return-on-investment results are as follows:
1. Agnico Eagle Mines Ltd. (AEM) -- Continuation
The transactions are as follows:
09/24/2014 Sold 3 Oct2014 $30.00 Puts @ $1.10
Note: The price of Agnico Eagle was $30.03 when this transaction was
executed.
10/17/2014 3 Oct2014 $30.00 Puts expired
Note: the price of AEM was $28.72 when these Puts expired
10/20/2014 Sold 3 Nov2014 $30.00 Calls @ $1.75
Note: the price of AEM was $29.55 when these options were sold.
11/21/2014 3 Nov2014 Call options expired
Note: the price of AEM was $26.64 today upon Nov2014 options expiration
12/09/2014 Sold 3 AEM Dec2014 $27.50 Call options @ $.35
Note: the price of AEM was $25.52 when these 3 Call options were sold.
12/20/2014 3 Dec2014 $27.50 Call options expired
01/05/2015 Sold 3 AEM Jan2015 $27.50 Call options @ $1.03
Note: the price of AEM was $27.25 when these Call options were sold.
Two possible overall performance results (including commissions) for this Agnico
Eagle Mines transaction would be as follows:
100% Cash-Secured Cost Basis:
$9,000.00 = $30.00*300
Note: the price of AEM was $30.03 when these Put
options were sold.
Net Profit:
(a) Options Income: +$1,224.20
=
($1.10+$1.75+$.35+$1.03)*300 shares - 4*$11.20 commissions
(b) Dividend Income: +$0.00
(c)
Capital Appreciation (If AEM close at current market price of $27.25 at Jan2015): -$825.00
= ($27.25-$30.00)*300 shares; OR
(c) Capital Appreciation (If AEM close above $27.50 at Jan2015 expiration): -$750.00
= ($27.50-$30.00)*300 shares
1. Total Net Profit (If AEM closes at current market price of $27.25 at Jan2015 options expiration): +$399.20
= (+$1,224.20 +$0.00
-$825.00); OR
2. Total Net Profit (If AEM is above $27.50 strike price at Jan2015 options expiration): +$474.20
= (+$1,224.20 +$0.00 -$750.00)
1. Absolute Return (If AEM is at $27.25 current market price at Jan2015 options
expiration and Call options thus expire worthless): +4.4%
=
+$399.20/$9,000.00
Annualized Return (If AEM is unchanged at $27.25 at Jan2015 expiration): +14.1%
= (+$399.20/$9,000.00)*(365/115 days); OR
2. Absolute Return (If AEM is above $27.50 strike price at Jan2015 options expiration and Call options are assigned): +5.3%
= +$474.20/$9,000.00
Annualized Return (If AEM is above $27.50 at Jan2015 expiration): +16.7%
= (+$474.20/$9,000.00)*(365/115 days)
