Check these out. These points really do make a lot of sense. We are treading in a really uncertain territory here and although that happens to be a rich area for option traders, if not done properly, you can get burned easily.
By following a few simple rules, we can try our best to minimize damage.
Good rules to follow.
Saturday, January 31, 2009
Friday, January 30, 2009
Jan 2009 Portfolio Performance Report - Summary
Here is the status of the portfolio at the end of Jan 2009.
Portfolio Details
Portfolio Details
- Inception date = 20081222
- Period start date = 20090101
- Period end date = 20090131
- Portfolio value at start = 100000
- Free cash at end of period = 372345
- Value of open positions at end = 631443
- Total Value at end = Cash at end + Value of open positions = 1003788
- Jan 2009 Return = 0.38%
- Percentage return since inception = 0.38%
Thursday, January 29, 2009
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.
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.
- Transaction Date = 20090129
- Ticker = (BAC)
- Company Name = BK OF AMERICA CP
- Number of shares purchased = 3000
- Price per share = 6.78
- Total money spent = 20340.0
- 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
- Initial investment = 13140.0
- Absolute return = 1860.0
- Percentage return = 14.15%
- Annualized percentage return = 101.26%
- Break even price point = 4.38
- Break even buffer percentage = 35.39%
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.
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.
- Transaction Date = 20090129
- Ticker = (PRU)
- Company Name = PRUDENTIAL FINCL
- Number of shares purchased = 1500
- Price per share = 28.62
- Total money spent = 42930.0
- 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
- Initial investment = 24330.0
- Absolute return = 5670.0
- Percentage return = 23.3%
- Annualized percentage return = 59.89%
- Break even price point = 16.22
- Break even buffer percentage = 43.32%
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.
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.
- Transaction Date = 20090129
- Ticker = (AMZN)
- Company Name = Amazon.com, Inc.
- Number of shares purchased = 600
- Price per share = 50.0
- Total money spent = 30000.0
- 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
- Initial investment = 25740.0
- Absolute return = 1260.0
- Percentage return = 4.89%
- Annualized percentage return = 77.6%
- Break even price point = 42.9
- Break even buffer percentage = 14.19%
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.
Monday, January 26, 2009
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.
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.
- Transaction Date = 20090126
- Ticker = (AFL)
- Company Name = A F L A C INC
- Number of shares purchased = 2000
- Price per share = 19.62
- Total money spent = 39240.0
- 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
- Initial investment = 21640.0
- Absolute return = 3360.0
- Percentage return = 15.52%
- Annualized percentage return = 51.49%
- Break even price point = 10.82
- Break even buffer percentage = 44.85%
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.
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.
- Transaction Date = 20090126
- Ticker = (PRU)
- Company Name = PRUDENTIAL FINCL
- Number of shares purchased = 1500
- Price per share = 25.02
- Total money spent = 37530.0
- 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
- Initial investment = 23730.0
- Absolute return = 2520.0
- Percentage return = 10.61%
- Annualized percentage return = 71.71%
- Break even price point = 15.82
- Break even buffer percentage = 36.77%
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.
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.
- Transaction Date = 20090126
- Ticker = (ROH)
- Company Name = ROHM HAAS CO
- Number of shares purchased = 600
- Price per share = 57.1
- Total money spent = 34260.0
- 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
- Initial investment = 24420.0
- Absolute return = 2580.0
- Percentage return = 10.56%
- Annualized percentage return = 47.0%
- Break even price point = 40.7
- Break even buffer percentage = 28.72%
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.
Wednesday, January 21, 2009
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.
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.
- Transaction Date = 20090121
- Ticker = (AAPL)
- Company Name = Apple Inc.
- Number of shares purchased = 300
- Price per share = 82.83
- Total money spent = 24849.0
- 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
- Initial investment = 22629.0
- Absolute return = 1371.0
- Percentage return = 6.05%
- Annualized percentage return = 71.23%
- Break even price point = 75.43
- Break even buffer percentage = 8.93%
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.
Tuesday, January 20, 2009
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.
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.
- Transaction Date = 20090120
- Ticker = (JPM)
- Company Name = JP MORGAN CHASE C
- Number of shares purchased = 2000
- Price per share = 18.09
- Total money spent = 36180.0
- 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
- Initial investment = 22180.0
- Absolute return = 2820.0
- Percentage return = 12.71%
- Annualized percentage return = 77.31%
- Break even price point = 11.09
- Break even buffer percentage = 38.69%
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.
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