Saturday, May 18, 2013

ARO CC vs CSP - Closed

The ARO May13 13.00 Call was exercised and the stock was called away, and the ARO May13 13.00 Put expired. As you can see below, these positions generated an equivalent return after being held for 6 months and through 5 adjustments. This proves that CC's and CSP's are equivalent positions when done at the same strike/expiration.

CC Position Summary - Traditional Accounting

Aeropostale (ARO). All prices include IB commissions.

Cost Basis$1,320.00
Net Profit$210.41
Percent Return15.94%
Annualized Return34.43%
Days Held to Expiration169 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
11/29/2012AROInitial Stock PositionBTO 100 ARO @ 13.20 ($1,320.00) 
11/29/2012AROInitial Call OptionSTO 1 Dec12 12.00 Call @ 1.35Closed $134.52
12/21/2012AROBuy BackBTC 1 Dec12 12.00 Call @ -1.13  ($113.06)
12/21/2012ARORoll Out/UpSTO 1 Jan13 12.50 Call @ 0.99Closed $98.94
1/17/2013AROBuy BackBTC 1 Jan13 12.50 Call @ -0.80  ($80.37)
1/17/2013ARORoll Out/UpSTO 1 Feb13 13.00 Call @ 0.74Closed $73.93
2/13/2013AROBuy BackBTC 1 Feb13 13.00 Call @ -0.35  ($35.27)
2/13/2013ARORoll OutSTO 1 Mar13 13.00 Call @ 0.89Closed $88.93
3/15/2013AROBuy BackBTC 1 Mar13 13.00 Call @ -0.80  ($80.37)
3/15/2013ARORoll Out/UpSTO 1 Apr13 13.00 Call @ 0.99Closed $98.93
4/19/2013AROBuy BackBTC 1 Apr13 13.00 Call @ -0.05  ($5.37)
4/19/2013ARORoll OutSTO 1 May13 13.00 Call @ 0.50Exercised $49.63
5/17/2013AROStock CalledEX 1 May13 13.00 Call @ 13.00  $1,299.97
5/17/2013ARO Net Cost/Profit-Loss ($1,320.00)$210.41
DTE169 Percent Profit-Loss/Annualized 15.94%34.43%

CC Position Summary - Modified Accounting to Adjust for Intrinsic Value

Aeropostale (ARO). All prices include IB commissions.

Cost Basis$1,300.00
Net Profit$210.41
Percent Return16.19%
Annualized Return34.96%
Days Held to Expiration169 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
11/29/2012AROInitial Stock PositionBTO 100 ARO @ 13.20 ($1,320.00) 
11/29/2012AROInitial Call OptionSTO 1 Dec12 12.00 Call @ 1.35Closed$120.00$14.52
12/21/2012AROBuy BackBTC 1 Dec12 12.00 Call @ -1.13 ($120.00)$6.94
12/21/2012ARORoll Out/UpSTO 1 Jan13 12.50 Call @ 0.99Closed$70.00$28.94
1/17/2013AROBuy BackBTC 1 Jan13 12.50 Call @ -0.80 ($70.00)($10.37)
1/17/2013ARORoll Out/UpSTO 1 Feb13 13.00 Call @ 0.74Closed$20.00$53.93
2/13/2013AROBuy BackBTC 1 Feb13 13.00 Call @ -0.35 ($20.00)($15.27)
2/13/2013ARORoll OutSTO 1 Mar13 13.00 Call @ 0.89Closed$20.00$68.93
3/15/2013AROBuy BackBTC 1 Mar13 13.00 Call @ -0.80 ($20.00)($60.37)
3/15/2013ARORoll Out/UpSTO 1 Apr13 13.00 Call @ 0.99Closed$20.00$78.93
4/19/2013AROBuy BackBTC 1 Apr13 13.00 Call @ -0.05 ($20.00)$14.63
4/19/2013ARORoll OutSTO 1 May13 13.00 Call @ 0.50Exercised$20.00$29.63
5/17/2013AROStock CalledEX 1 May13 13.00 Call @ 13.00 $0.00$1,299.97
5/17/2013ARO Net Cost/Profit-Loss ($1,300.00)$210.41
DTE169 Percent Profit-Loss/Annualized 16.19%34.96%

CSP Position Summary

Aeropostale (ARO). All prices include IB commissions.

Cost Basis$1,300.00
Net Profit$213.98
Percent Return16.46%
Annualized Return35.55%
Days Held to Expiration169 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
11/29/2012AROCSP Margin UsedCSP 100 ARO @ 12.00Closed($1,200.00) 
11/29/2012AROInitial Put OptionSTO 1 Dec12 12.00 Put @ 0.14Closed $14.12
12/21/2012AROBuy BackBTC 1 Dec12 12.00 Put @ -0.05  ($5.48)
12/21/2012AROCSP Margin ReturnedCSP 100 ARO @ -12.00 $1,200.00 
12/21/2012AROCSP Margin UsedCSP 100 ARO @ 12.50Closed($1,250.00) 
12/21/2012ARORoll Out/UpSTO 1 Jan13 12.50 Put @ 0.39Closed $38.94
1/17/2013AROBuy BackBTC 1 Jan13 12.50 Put @ -0.07  ($7.07)
1/17/2013AROCSP Margin ReturnedCSP 100 ARO @ -12.50 $1,250.00 
1/17/2013AROCSP Margin UsedCSP 100 ARO @ 13.00 ($1,300.00) 
1/17/2013ARORoll Out/UpSTO 1 Feb13 13.00 Put @ 0.55Closed $54.51
2/13/2013AROBuy BackBTC 1 Feb13 13.00 Put @ -0.15  ($15.37)
2/13/2013ARORoll OutSTO 1 Mar13 13.00 Put @ 0.65Closed $64.73
3/15/2013AROBuy BackBTC 1 Mar13 13.00 Put @ -0.05  ($5.37)
3/15/2013ARORoll Out/UpSTO 1 Apr13 13.00 Put @ 0.29Closed $29.11
4/19/2013AROBuy BackBTC 1 Apr13 13.00 Put @ -0.16  ($16.07)
4/19/2013ARORoll OutSTO 1 May13 13.00 Put @ 0.62Expired $61.93
5/17/2013AROCSP Margin ReturnedCSP 100 ARO @ -13.00  $1,300.00
5/17/2013ARO Net Cost/Profit-Loss ($1,300.00)$213.98
DTE169 Percent Profit-Loss/Annualized 16.46%35.55%

Saturday, May 11, 2013

AVP - Closed

The Avon Products Inc (AVP) Jul13 16.00 Call was exercised and the position was closed. All prices include IB commissions.

This positon is an example of how selling a call below your cost basis can result in a loss. In hindsight, I should have held the stock uncovered and waited for the recovery. However, since Avon no longer meets my criteria, I decided to take the loss and move on.

Closed Position Summary

Cost Basis$5,200.00
Net Profit($1,454.09)
Percent Return-27.96%
Annualized Return-14.22%
Days Held to Expiration718 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011AVPCSP Margin UsedCSP 200 AVP @ 26.00 ($5,200.00) 
5/23/2011AVPInitial Put OptionSTO 2 Oct11 26.00 Put @ 0.82Exercised $164.56
10/21/2011AVPCSP Margin ReturnedCSP 200 AVP @ -26.00   
10/21/2011AVPStock AssignedEX 2 Oct11 26.00 Put @ -26.00Called $0.00
12/1/2011AVPDividend ReceivedDIV 200 Dividend @ 0.23  $46.00
3/1/2012AVPDividend ReceivedDIV 200 Dividend @ 0.23  $46.00
4/4/2012AVPContinued TradeSTO 2 May12 25.00 Call @ 0.34Expired $68.55
6/1/2012AVPDividend ReceivedDIV 200 Dividend @ 0.23  $46.00
7/27/2012AVPContinued TradeSTO 2 Aug12 19.00 Call @ 0.09Expired $18.49
9/4/2012AVPDividend ReceivedDIV 200 Dividend @ 0.23  $46.00
9/14/2012AVPContinued TradeSTO 2 Oct12 19.00 Call @ 0.14  $28.48
12/3/2012AVPDividend ReceivedDIV 200 Dividend @ 0.06  $12.00
12/5/2012AVPContinued TradeSTO 2 Jan13 15.00 Call @ 0.39Closed $78.68
1/17/2013AVPBuy BackBTC 2 Jan13 15.00 Call @ -1.01  ($201.54)
1/17/2013AVPRoll Out/UpSTO 2 Feb13 16.00 Call @ 0.76Closed $152.46
2/12/2013AVPBuy BackBTC 2 Feb13 16.00 Call @ -4.86  ($971.54)
2/12/2013AVPRoll Out/UpSTO 2 Jul13 16.00 Call @ 5.00Exercised $999.84
3/1/2013AVPDividend ReceivedDIV 200 Dividend @ 0.06  $12.00
5/10/2013AVPStock CalledEX 2 Jul13 16.00 Call @ 16.00  $3,199.93
5/10/2013AVP Net Cost/Profit-Loss ($5,200.00)($1,454.09)
DTE-631 Percent Profit-Loss/Annualized -27.96%16.18%