Opened (BAC) March 2009 covered call position for BK OF AMERICA CP

A new covered calls position was established on January 29, 2009 with purchase of 3000 shares of "BK OF AMERICA CP" (BAC). Here are the details.

• Transaction Date = 20090129
• Ticker = (BAC)
• Company Name = BK OF AMERICA CP

Stock Leg (Buy)

• Number of shares purchased = 3000
• Price per share = 6.78
• Total money spent = 20340.0

Option Leg (Sell)

• Call Symbol = BYOCE
• Number of sold calls = 30
• Strike price = 5.0
• Strike date = 20090320
• Call premium = 2.4
• Total money received = 7200.0005
• Max. days for which position may stay open = 51

Return on investment (If calls are exercised)

• Initial investment = 13140.0
• Absolute return = 1860.0
• Percentage return = 14.15%
• Annualized percentage return = 101.26%

Break even Information

• Break even price point = 4.38
• Break even buffer percentage = 35.39%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 6.78 * 3000 = 20340.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 30 * 100 * 2.4 = 7200.0005

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 20340.0 - 7200.0005 = 13140.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 30 * 100 * 5.0 = 15000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 15000.0 - 13140.0 = 1860.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1860.0/13140.0) = 14.15%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 14.15 * 365/51 = 101.26%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 13140.0 / 3000 = 4.38
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (6.78 - 4.38) / 6.78 = 35.39%
This means that this position can weather a 35.39% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (PRU) June 2009 covered call position for PRUDENTIAL FINCL

A new covered calls position was established on January 29, 2009 with purchase of 1500 shares of "PRUDENTIAL FINCL " (PRU). Here are the details.

• Transaction Date = 20090129
• Ticker = (PRU)
• Company Name = PRUDENTIAL FINCL

Stock Leg (Buy)

• Number of shares purchased = 1500
• Price per share = 28.62
• Total money spent = 42930.0

Option Leg (Sell)

• Call Symbol = PRUFX
• Number of sold calls = 15
• Strike price = 20.0
• Strike date = 20090619
• Call premium = 12.4
• Total money received = 18600.0
• Max. days for which position may stay open = 142

Return on investment (If calls are exercised)

• Initial investment = 24330.0
• Absolute return = 5670.0
• Percentage return = 23.3%
• Annualized percentage return = 59.89%

Break even Information

• Break even price point = 16.22
• Break even buffer percentage = 43.32%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 28.62 * 1500 = 42930.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 15 * 100 * 12.4 = 18600.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 42930.0 - 18600.0 = 24330.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 15 * 100 * 20.0 = 30000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 30000.0 - 24330.0 = 5670.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (5670.0/24330.0) = 23.3%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 23.3 * 365/142 = 59.89%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 24330.0 / 1500 = 16.22
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (28.62 - 16.22) / 28.62 = 43.32%
This means that this position can weather a 43.32% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (AMZN) February 2009 covered call position for Amazon.com, Inc.

A new covered calls position was established on January 29, 2009 with purchase of 600 shares of "Amazon.com, Inc." (AMZN). Here are the details.

• Transaction Date = 20090129
• Ticker = (AMZN)
• Company Name = Amazon.com, Inc.

Stock Leg (Buy)

• Number of shares purchased = 600
• Price per share = 50.0
• Total money spent = 30000.0

Option Leg (Sell)

• Call Symbol = ZQNBI
• Number of sold calls = 6
• Strike price = 45.0
• Strike date = 20090220
• Call premium = 7.1
• Total money received = 4260.0
• Max. days for which position may stay open = 23

Return on investment (If calls are exercised)

• Initial investment = 25740.0
• Absolute return = 1260.0
• Percentage return = 4.89%
• Annualized percentage return = 77.6%

Break even Information

• Break even price point = 42.9
• Break even buffer percentage = 14.19%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 50.0 * 600 = 30000.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 6 * 100 * 7.1 = 4260.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 30000.0 - 4260.0 = 25740.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 6 * 100 * 45.0 = 27000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 27000.0 - 25740.0 = 1260.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1260.0/25740.0) = 4.89%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 4.89 * 365/23 = 77.6%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 25740.0 / 600 = 42.9
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (50.0 - 42.9) / 50.0 = 14.19%
This means that this position can weather a 14.19% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (AFL) May 2009 covered call position for A F L A C INC

A new covered calls position was established on January 26, 2009 with purchase of 2000 shares of "A F L A C INC" (AFL). Here are the details.

• Transaction Date = 20090126
• Ticker = (AFL)
• Company Name = A F L A C INC

Stock Leg (Buy)

• Number of shares purchased = 2000
• Price per share = 19.62
• Total money spent = 39240.0

Option Leg (Sell)

• Call Symbol = AFLEV
• Number of sold calls = 20
• Strike price = 12.5
• Strike date = 20090515
• Call premium = 8.8
• Total money received = 17600.0
• Max. days for which position may stay open = 110

Return on investment (If calls are exercised)

• Initial investment = 21640.0
• Absolute return = 3360.0
• Percentage return = 15.52%
• Annualized percentage return = 51.49%

Break even Information

• Break even price point = 10.82
• Break even buffer percentage = 44.85%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 19.62 * 2000 = 39240.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 20 * 100 * 8.8 = 17600.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 39240.0 - 17600.0 = 21640.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 20 * 100 * 12.5 = 25000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 25000.0 - 21640.0 = 3360.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (3360.0/21640.0) = 15.52%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 15.52 * 365/110 = 51.49%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 21640.0 / 2000 = 10.82
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (19.62 - 10.82) / 19.62 = 44.85%
This means that this position can weather a 44.85% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (PRU) March 2009 covered call position for PRUDENTIAL FINCL

A new covered calls position was established on January 26, 2009 with purchase of 1500 shares of "PRUDENTIAL FINCL " (PRU). Here are the details.

• Transaction Date = 20090126
• Ticker = (PRU)
• Company Name = PRUDENTIAL FINCL

Stock Leg (Buy)

• Number of shares purchased = 1500
• Price per share = 25.02
• Total money spent = 37530.0

Option Leg (Sell)

• Call Symbol = PRUCW
• Number of sold calls = 15
• Strike price = 17.5
• Strike date = 20090320
• Call premium = 9.2
• Total money received = 13800.0
• Max. days for which position may stay open = 54

Return on investment (If calls are exercised)

• Initial investment = 23730.0
• Absolute return = 2520.0
• Percentage return = 10.61%
• Annualized percentage return = 71.71%

Break even Information

• Break even price point = 15.82
• Break even buffer percentage = 36.77%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 25.02 * 1500 = 37530.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 15 * 100 * 9.2 = 13800.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 37530.0 - 13800.0 = 23730.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 15 * 100 * 17.5 = 26250.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 26250.0 - 23730.0 = 2520.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (2520.0/23730.0) = 10.61%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 10.61 * 365/54 = 71.71%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 23730.0 / 1500 = 15.82
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (25.02 - 15.82) / 25.02 = 36.77%
This means that this position can weather a 36.77% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (ROH) April 2009 covered call position for ROHM HAAS CO

A new covered calls position was established on January 26, 2009 with purchase of 600 shares of "ROHM HAAS CO" (ROH). Here are the details.

• Transaction Date = 20090126
• Ticker = (ROH)
• Company Name = ROHM HAAS CO

Stock Leg (Buy)

• Number of shares purchased = 600
• Price per share = 57.1
• Total money spent = 34260.0

Option Leg (Sell)

• Call Symbol = ROHDI
• Number of sold calls = 6
• Strike price = 45.0
• Strike date = 20090417
• Call premium = 16.4
• Total money received = 9840.0
• Max. days for which position may stay open = 82

Return on investment (If calls are exercised)

• Initial investment = 24420.0
• Absolute return = 2580.0
• Percentage return = 10.56%
• Annualized percentage return = 47.0%

Break even Information

• Break even price point = 40.7
• Break even buffer percentage = 28.72%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 57.1 * 600 = 34260.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 6 * 100 * 16.4 = 9840.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 34260.0 - 9840.0 = 24420.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 6 * 100 * 45.0 = 27000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 27000.0 - 24420.0 = 2580.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (2580.0/24420.0) = 10.56%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 10.56 * 365/82 = 47.0%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 24420.0 / 600 = 40.7
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (57.1 - 40.7) / 57.1 = 28.72%
This means that this position can weather a 28.72% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (AAPL) February 2009 covered call position for Apple Inc.

A new covered calls position was established on January 21, 2009 with purchase of 300 shares of "Apple Inc." (AAPL). Here are the details.

• Transaction Date = 20090121
• Ticker = (AAPL)
• Company Name = Apple Inc.

Stock Leg (Buy)

• Number of shares purchased = 300
• Price per share = 82.83
• Total money spent = 24849.0

Option Leg (Sell)

• Call Symbol = QAABP
• Number of sold calls = 3
• Strike price = 80.0
• Strike date = 20090220
• Call premium = 7.4
• Total money received = 2220.0
• Max. days for which position may stay open = 31

Return on investment (If calls are exercised)

• Initial investment = 22629.0
• Absolute return = 1371.0
• Percentage return = 6.05%
• Annualized percentage return = 71.23%

Break even Information

• Break even price point = 75.43
• Break even buffer percentage = 8.93%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 82.83 * 300 = 24849.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 3 * 100 * 7.4 = 2220.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 24849.0 - 2220.0 = 22629.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 3 * 100 * 80.0 = 24000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 24000.0 - 22629.0 = 1371.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1371.0/22629.0) = 6.05%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 6.05 * 365/31 = 71.23%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 22629.0 / 300 = 75.43
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (82.83 - 75.43) / 82.83 = 8.93%
This means that this position can weather a 8.93% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (JPM) March 2009 covered call position for JP MORGAN CHASE C

A new covered calls position was established on January 20, 2009 with purchase of 2000 shares of "JP MORGAN CHASE C" (JPM). Here are the details.

• Transaction Date = 20090120
• Ticker = (JPM)
• Company Name = JP MORGAN CHASE C

Stock Leg (Buy)

• Number of shares purchased = 2000
• Price per share = 18.09
• Total money spent = 36180.0

Option Leg (Sell)

• Call Symbol = JSACY
• Number of sold calls = 20
• Strike price = 12.5
• Strike date = 20090320
• Call premium = 7.0
• Total money received = 14000.0
• Max. days for which position may stay open = 60

Return on investment (If calls are exercised)

• Initial investment = 22180.0
• Absolute return = 2820.0
• Percentage return = 12.71%
• Annualized percentage return = 77.31%

Break even Information

• Break even price point = 11.09
• Break even buffer percentage = 38.69%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 18.09 * 2000 = 36180.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 20 * 100 * 7.0 = 14000.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 36180.0 - 14000.0 = 22180.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 20 * 100 * 12.5 = 25000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 25000.0 - 22180.0 = 2820.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (2820.0/22180.0) = 12.71%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 12.71 * 365/60 = 77.31%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 22180.0 / 2000 = 11.09
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (18.09 - 11.09) / 18.09 = 38.69%
This means that this position can weather a 38.69% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (USB) March 2009 covered call position for US BANCORP

A new covered calls position was established on January 20, 2009 with purchase of 2000 shares of "US BANCORP" (USB). Here are the details.

• Transaction Date = 20090120
• Ticker = (USB)
• Company Name = US BANCORP

Stock Leg (Buy)

• Number of shares purchased = 2000
• Price per share = 15.34
• Total money spent = 30680.0

Option Leg (Sell)

• Call Symbol = USBCB
• Number of sold calls = 20
• Strike price = 10.0
• Strike date = 20090320
• Call premium = 6.3
• Total money received = 12600.0
• Max. days for which position may stay open = 60

Return on investment (If calls are exercised)

• Initial investment = 18080.0
• Absolute return = 1920.0
• Percentage return = 10.61%
• Annualized percentage return = 64.54%

Break even Information

• Break even price point = 9.04
• Break even buffer percentage = 41.06%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 15.34 * 2000 = 30680.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 20 * 100 * 6.3 = 12600.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 30680.0 - 12600.0 = 18080.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 20 * 100 * 10.0 = 20000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 20000.0 - 18080.0 = 1920.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1920.0/18080.0) = 10.61%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 10.61 * 365/60 = 64.54%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 18080.0 / 2000 = 9.04
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (15.34 - 9.04) / 15.34 = 41.06%
This means that this position can weather a 41.06% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (PRU) March 2009 covered call position for PRUDENTIAL FINCL

A new covered calls position was established on January 20, 2009 with purchase of 2000 shares of "PRUDENTIAL FINCL " (PRU). Here are the details.

• Transaction Date = 20090120
• Ticker = (PRU)
• Company Name = PRUDENTIAL FINCL

Stock Leg (Buy)

• Number of shares purchased = 2000
• Price per share = 21.92
• Total money spent = 43840.0

Option Leg (Sell)

• Call Symbol = PRUCV
• Number of sold calls = 20
• Strike price = 12.5
• Strike date = 20090320
• Call premium = 10.5
• Total money received = 21000.0
• Max. days for which position may stay open = 60

Return on investment (If calls are exercised)

• Initial investment = 22840.0
• Absolute return = 2160.0
• Percentage return = 9.45%
• Annualized percentage return = 57.48%

Break even Information

• Break even price point = 11.42
• Break even buffer percentage = 47.9%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 21.92 * 2000 = 43840.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 20 * 100 * 10.5 = 21000.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 43840.0 - 21000.0 = 22840.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 20 * 100 * 12.5 = 25000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 25000.0 - 22840.0 = 2160.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (2160.0/22840.0) = 9.45%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 9.45 * 365/60 = 57.48%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 22840.0 / 2000 = 11.42
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (21.92 - 11.42) / 21.92 = 47.9%
This means that this position can weather a 47.9% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (MET) February 2009 covered call position for METLIFE INC

A new covered calls position was established on January 20, 2009 with purchase of 1000 shares of "METLIFE INC" (MET). Here are the details.

• Transaction Date = 20090120
• Ticker = (MET)
• Company Name = METLIFE INC

Stock Leg (Buy)

• Number of shares purchased = 1000
• Price per share = 23.82
• Total money spent = 23820.0

Option Leg (Sell)

• Call Symbol = METBD
• Number of sold calls = 10
• Strike price = 20.0
• Strike date = 20090220
• Call premium = 5.6
• Total money received = 5600.0
• Max. days for which position may stay open = 32

Return on investment (If calls are exercised)

• Initial investment = 18220.0
• Absolute return = 1780.0
• Percentage return = 9.76%
• Annualized percentage return = 111.32%

Break even Information

• Break even price point = 18.22
• Break even buffer percentage = 23.5%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 23.82 * 1000 = 23820.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 10 * 100 * 5.6 = 5600.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 23820.0 - 5600.0 = 18220.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 10 * 100 * 20.0 = 20000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 20000.0 - 18220.0 = 1780.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1780.0/18220.0) = 9.76%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 9.76 * 365/32 = 111.32%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 18220.0 / 1000 = 18.22
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (23.82 - 18.22) / 23.82 = 23.5%
This means that this position can weather a 23.5% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).

The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (WFR) February 2009 covered call position for MEMC ELECTRONIC M

A new covered calls position was established on January 13, 2009 with purchase of 2000 shares of "MEMC ELECTRONIC M" (WFR). Here are the details.

• Transaction Date = 20090113
• Ticker = (WFR)
• Company Name = MEMC ELECTRONIC M

Stock Leg (Buy)

• Number of shares purchased = 2000
• Price per share = 14.78
• Total money spent = 29560.0

Option Leg (Sell)

• Call Symbol = CJCBV
• Number of sold calls = 20
• Strike price = 12.5
• Strike date = 20090220
• Call premium = 3.2
• Total money received = 6400.0
• Max. days for which position may stay open = 39

Return on investment (If calls are exercised)

• Initial investment = 23160.0
• Absolute return = 1840.0
• Percentage return = 7.94%
• Annualized percentage return = 74.31%

Break even Information

• Break even price point = 11.58
• Break even buffer percentage = 21.65%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 14.78 * 2000 = 29560.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 20 * 100 * 3.2 = 6400.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 29560.0 - 6400.0 = 23160.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 20 * 100 * 12.5 = 25000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 25000.0 - 23160.0 = 1840.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1840.0/23160.0) = 7.94%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 7.94 * 365/39 = 74.31%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 23160.0 / 2000 = 11.58
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (14.78 - 11.58) / 14.78 = 21.65%
This means that this position can weather a 21.65% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (SWN) March 2009 covered call position for SOUTHWESTERN ENER

A new covered calls position was established on January 13, 2009 with purchase of 1000 shares of "SOUTHWESTERN ENER" (SWN). Here are the details.

• Transaction Date = 20090113
• Ticker = (SWN)
• Company Name = SOUTHWESTERN ENER

Stock Leg (Buy)

• Number of shares purchased = 1000
• Price per share = 29.5
• Total money spent = 29500.0

Option Leg (Sell)

• Call Symbol = SWNCE
• Number of sold calls = 10
• Strike price = 25.0
• Strike date = 20090320
• Call premium = 6.8
• Total money received = 6800.0
• Max. days for which position may stay open = 67

Return on investment (If calls are exercised)

• Initial investment = 22700.0
• Absolute return = 2300.0
• Percentage return = 10.13%
• Annualized percentage return = 55.18%

Break even Information

• Break even price point = 22.7
• Break even buffer percentage = 23.05%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 29.5 * 1000 = 29500.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 10 * 100 * 6.8 = 6800.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 29500.0 - 6800.0 = 22700.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 10 * 100 * 25.0 = 25000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 25000.0 - 22700.0 = 2300.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (2300.0/22700.0) = 10.13%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 10.13 * 365/67 = 55.18%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 22700.0 / 1000 = 22.7
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (29.5 - 22.7) / 29.5 = 23.05%
This means that this position can weather a 23.05% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (SNDK) February 2009 covered call position for SanDisk Corporati

A new covered calls position was established on January 9, 2009 with purchase of 2000 shares of "SanDisk Corporati" (SNDK). Here are the details.

• Transaction Date = 20090109
• Ticker = (SNDK)
• Company Name = SanDisk Corporati

Stock Leg (Buy)

• Number of shares purchased = 2000
• Price per share = 12.3
• Total money spent = 24600.0

Option Leg (Sell)

• Call Symbol = SWQBM
• Number of sold calls = 20
• Strike price = 11.0
• Strike date = 20090220
• Call premium = 2.42
• Total money received = 4840.0
• Max. days for which position may stay open = 43

Return on investment (If calls are exercised)

• Initial investment = 19760.0
• Absolute return = 2240.0
• Percentage return = 11.33%
• Annualized percentage return = 96.17%

Break even Information

• Break even price point = 9.88
• Break even buffer percentage = 19.67%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 12.3 * 2000 = 24600.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 20 * 100 * 2.42 = 4840.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 24600.0 - 4840.0 = 19760.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 20 * 100 * 11.0 = 22000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 22000.0 - 19760.0 = 2240.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (2240.0/19760.0) = 11.33%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 11.33 * 365/43 = 96.17%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 19760.0 / 2000 = 9.88
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (12.3 - 9.88) / 12.3 = 19.67%
This means that this position can weather a 19.67% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (JWN) February 2009 covered call position for NORDSTROM INC

A new covered calls position was established on January 9, 2009 with purchase of 2000 shares of "NORDSTROM INC" (JWN). Here are the details.

• Transaction Date = 20090109
• Ticker = (JWN)
• Company Name = NORDSTROM INC

Stock Leg (Buy)

• Number of shares purchased = 2000
• Price per share = 13.96
• Total money spent = 27920.0

Option Leg (Sell)

• Call Symbol = JWNBV
• Number of sold calls = 20
• Strike price = 12.5
• Strike date = 20090220
• Call premium = 2.45
• Total money received = 4900.0
• Max. days for which position may stay open = 43

Return on investment (If calls are exercised)

• Initial investment = 23020.0
• Absolute return = 1980.0
• Percentage return = 8.6%
• Annualized percentage return = 73.0%

Break even Information

• Break even price point = 11.51
• Break even buffer percentage = 17.55%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 13.96 * 2000 = 27920.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 20 * 100 * 2.45 = 4900.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 27920.0 - 4900.0 = 23020.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 20 * 100 * 12.5 = 25000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 25000.0 - 23020.0 = 1980.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1980.0/23020.0) = 8.6%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 8.6 * 365/43 = 73.0%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 23020.0 / 2000 = 11.51
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (13.96 - 11.51) / 13.96 = 17.55%
This means that this position can weather a 17.55% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (BTU) March 2009 covered call position for PEABODY ENERGY CO

A new covered calls position was established on January 8, 2009 with purchase of 1000 shares of "PEABODY ENERGY CO" (BTU). Here are the details.

• Transaction Date = 20090108
• Ticker = (BTU)
• Company Name = PEABODY ENERGY CO

Stock Leg (Buy)

• Number of shares purchased = 1000
• Price per share = 26.68
• Total money spent = 26680.0

Option Leg (Sell)

• Call Symbol = BTUCX
• Number of sold calls = 10
• Strike price = 22.5
• Strike date = 20090320
• Call premium = 6.5
• Total money received = 6500.0
• Max. days for which position may stay open = 72

Return on investment (If calls are exercised)

• Initial investment = 20180.0
• Absolute return = 2320.0
• Percentage return = 11.49%
• Annualized percentage return = 58.24%

Break even Information

• Break even price point = 20.18
• Break even buffer percentage = 24.36%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 26.68 * 1000 = 26680.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 10 * 100 * 6.5 = 6500.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 26680.0 - 6500.0 = 20180.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 10 * 100 * 22.5 = 22500.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 22500.0 - 20180.0 = 2320.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (2320.0/20180.0) = 11.49%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 11.49 * 365/72 = 58.24%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 20180.0 / 1000 = 20.18
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (26.68 - 20.18) / 26.68 = 24.36%
This means that this position can weather a 24.36% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (JPM) March 2009 covered call position for JP MORGAN CHASE C

A new covered calls position was established on January 8, 2009 with purchase of 1000 shares of "JP MORGAN CHASE C" (JPM). Here are the details.

• Transaction Date = 20090108
• Ticker = (JPM)
• Company Name = JP MORGAN CHASE C

Stock Leg (Buy)

• Number of shares purchased = 1000
• Price per share = 27.22
• Total money spent = 27220.0

Option Leg (Sell)

• Call Symbol = JSACS
• Number of sold calls = 10
• Strike price = 22.5
• Strike date = 20090320
• Call premium = 6.8
• Total money received = 6800.0
• Max. days for which position may stay open = 72

Return on investment (If calls are exercised)

• Initial investment = 20420.0
• Absolute return = 2080.0
• Percentage return = 10.18%
• Annualized percentage return = 51.6%

Break even Information

• Break even price point = 20.42
• Break even buffer percentage = 24.98%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 27.22 * 1000 = 27220.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 10 * 100 * 6.8 = 6800.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 27220.0 - 6800.0 = 20420.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 10 * 100 * 22.5 = 22500.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 22500.0 - 20420.0 = 2080.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (2080.0/20420.0) = 10.18%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 10.18 * 365/72 = 51.6%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 20420.0 / 1000 = 20.42
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (27.22 - 20.42) / 27.22 = 24.98%
This means that this position can weather a 24.98% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (FCX) February 2009 covered call position for FREEPORT MCMORAN

A new covered calls position was established on January 8, 2009 with purchase of 1000 shares of "FREEPORT MCMORAN " (FCX). Here are the details.

• Transaction Date = 20090108
• Ticker = (FCX)
• Company Name = FREEPORT MCMORAN

Stock Leg (Buy)

• Number of shares purchased = 1000
• Price per share = 29.25
• Total money spent = 29250.0

Option Leg (Sell)

• Call Symbol = FCXBE
• Number of sold calls = 10
• Strike price = 25.0
• Strike date = 20090220
• Call premium = 6.0
• Total money received = 6000.0
• Max. days for which position may stay open = 44

Return on investment (If calls are exercised)

• Initial investment = 23250.0
• Absolute return = 1750.0
• Percentage return = 7.52%
• Annualized percentage return = 62.38%

Break even Information

• Break even price point = 23.25
• Break even buffer percentage = 20.51%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 29.25 * 1000 = 29250.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 10 * 100 * 6.0 = 6000.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 29250.0 - 6000.0 = 23250.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 10 * 100 * 25.0 = 25000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 25000.0 - 23250.0 = 1750.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1750.0/23250.0) = 7.52%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 7.52 * 365/44 = 62.38%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 23250.0 / 1000 = 23.25
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (29.25 - 23.25) / 29.25 = 20.51%
This means that this position can weather a 20.51% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (FMCN) February 2009 covered call position for Focus Media Holdi

A new covered calls position was established on January 8, 2009 with purchase of 2000 shares of "Focus Media Holdi" (FMCN). Here are the details.

• Transaction Date = 20090108
• Ticker = (FMCN)
• Company Name = Focus Media Holdi

Stock Leg (Buy)

• Number of shares purchased = 2000
• Price per share = 8.99
• Total money spent = 17980.0

Option Leg (Sell)

• Call Symbol = FUOBU
• Number of sold calls = 20
• Strike price = 7.5
• Strike date = 20090220
• Call premium = 2.05
• Total money received = 4100.0
• Max. days for which position may stay open = 44

Return on investment (If calls are exercised)

• Initial investment = 13880.0
• Absolute return = 1120.0
• Percentage return = 8.06%
• Annualized percentage return = 66.86%

Break even Information

• Break even price point = 6.94
• Break even buffer percentage = 22.8%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 8.99 * 2000 = 17980.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 20 * 100 * 2.05 = 4100.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 17980.0 - 4100.0 = 13880.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 20 * 100 * 7.5 = 15000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 15000.0 - 13880.0 = 1120.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1120.0/13880.0) = 8.06%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 8.06 * 365/44 = 66.86%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 13880.0 / 2000 = 6.94
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (8.99 - 6.94) / 8.99 = 22.8%
This means that this position can weather a 22.8% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.

Opened (ICE) February 2009 covered call position for INTERCNTNTLEXCHAN

A new covered calls position was established on January 7, 2009 with purchase of 400 shares of "INTERCNTNTL EXCHAN" (ICE). Here are the details.

• Transaction Date = 20090107
• Ticker = (ICE)
• Company Name = INTERCNTNTLEXCHAN

Stock Leg (Buy)

• Number of shares purchased = 400
• Price per share = 64.08
• Total money spent = 25632.0

Option Leg (Sell)

• Call Symbol = ICEBK
• Number of sold calls = 4
• Strike price = 55.0
• Strike date = 20090220
• Call premium = 13.4
• Total money received = 5360.0
• Max. days for which position may stay open = 45

Return on investment (If calls are exercised)

• Initial investment = 20272.0
• Absolute return = 1728.0
• Percentage return = 8.52%
• Annualized percentage return = 69.1%

Break even Information

• Break even price point = 50.68
• Break even buffer percentage = 20.91%

Detailed Calculations & Explanation

Stock Leg (Buy)
Total money spent = price per share * number of shares
Total money spent = 64.08 * 400 = 25632.0

Option Leg (Sell)
Total money received = number of sold calls * 100 * call premium
Total money received = 4 * 100 * 13.4 = 5360.0

Transaction
Initial investment = Total money spent - Total money received
Initial investment = 25632.0 - 5360.0 = 20272.0

ROI calculations (If calls get exercised)
Money received upon exercise = (number of sold calls * 100 * strike price)
Money received upon exercise = 4 * 100 * 55.0 = 22000.0
Absolute returns = Money received upon exercise - Initial investment
Absolute returns = 22000.0 - 20272.0 = 1728.0
Percentage returns = 100 * (Absolute Returns/Initial investment)
Percentage returns = 100 * (1728.0/20272.0) = 8.52%
Annualized percentage returns = Percentage returns * 365/Max. days for which position may stay open
Annualized percentage returns = 8.52 * 365/45 = 69.1%

Break Even Information
Break-even point = Initial investment / Number of shares
Break-even point = 20272.0 / 400 = 50.68
Break-even buffer percentage = 100 * (Current price - Break-even point) / Current price
Break-even buffer percentage = 100 * (64.08 - 50.68) / 64.08 = 20.91%
This means that this position can weather a 20.91% drop in stock's price before losing any money.

The position will be watched closely and liquidated if it starts to hover around the break even point. A fall in the stock price till the strike price is expected to be compensated linearly by corresponding fall in the option's premium (thereby maintaining a balance and avoiding drastic losses if liquidity is desired).
The current portfolio details can be accessed here.

Disclaimer: The content of this blog is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.