As of today, options have now been sold for all fifteen Feb2016 portfolio positions shown under the 'Covered Calls Advisor Portfolio Holdings' section in the right sidebar. These fifteen positions represent 70.1% of the total portfolio value, with the other 29.9% now in cash.
A potential return-on-investment is -10.6% absolute return (equivalent to -67.8% annualized) for the 57 days of this Alibaba investment. Details of these Alibaba Group transactions to-date and a potential return-on-investment result are provided below:
The transactions are as follows:
12/24/2015 Sold 2 BABA 100% cash-secured $80.00 Put options with Jan2016 expirations @ $1.08
Note: the price of Alibaba was $83.92 today when this transaction was executed.
01/15/2016 2 BABA Puts expired; so 200 shares purchased @ $80.00 each
Note: the price of BABA was $69.59 upon Jan2016 options expiration
01/29/2016 Sold 2 BABA Feb2016 $67.50 Call options @ $3.05
Note: the price of Alibaba was $83.15 today when these two Call options were sold.
A potential performance result (including commissions) could be as follows:
100% Cash-Secured Cost Basis: $16,000.00
= $80.00*200
Net Profit:
(a) Options Income: +$807.10
= [($1.08 +$3.05) * 200 shares] - 2*$9.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If BABA closes above $67.50 strike price at Feb2016 expiration): -$2,500.00
= ($67.50 -$80.00)*200 shares
Total Net Profit: -$1,692.90
= (+$807.10 options income +$0.00 dividend income -$2,500.00 capital appreciation)
Absolute Return: -10.6%
= -$1,692.90/$16,000.00
Annualized Return: -67.8%
= (-$1,692.90/$16,000.00)*(365/57 days)
