NBL - Closed

The NBL Nov06 45 Call closed ITM today and the stock will be called away for a profit. The following is the trade history and returns, including IB commissions. The initial trade returned 3% cash back and was before I switch to longer term options with 12%+ cash back in March.

01/23/06 - Bought 200 shares of NBL @ 44.41
01/23/06 - Sold 2 Feb06 45 Calls @ 1.49
02/17/06 - Feb06 45 Calls expired
02/21/06 - Dividend received @ 0.05
02/24/06 - Sold 2 Mar06 45 Calls @0.69
03/17/06 - Mar06 45 Calls expired
03/20/06 - Sold 2 May06 45 Calls @ 0.99
05/19/06 - May06 45 Calls expired
05/22/06 - Dividend received @ 0.075
05/23/06 - Sold 2 Nov06 45 Calls @ 3.69
08/21/06 - Dividend received @ 0.075
11/17/06 - Nov06 45 Calls exercised and stock called away
11/20/06 - Dividend received @ 0.075*

*Dividend was paid on 11/02/06 and is expected to be received next week.

Stock Investment: $8,881.00
Income Generated: $1,429.00
Net Profit: $1,548.00
Percent Return: 17.43%
Annualized Return: 21.35%
Duration of Trade: 298 days

Buy & Hold Comparison

Opening Price: $44.41
Closing Price: $49.15
Dividends: $55.00
Net Profit: $1,002.00
Percent Return: 11.27%
Annualized Return: 13.81%
Duration of Trade: 298 days

If you look at a stock chart for NBL you'll see that during this trade NBL was up and down. At one point, in June while I was on vacation, it was down over 18%, a new 52 week low. Then it shot up to a new 52 week high in August. It went down again to around $42 in late September and early October, and finally climbed to where it closed today.

This trade had a larger profit than buy & hold. Also, with buy & hold the profit isn't received until the position is closed, except for dividends of course. With the covered call trade most of the profit was received long before the position was closed. That money could then remain in the account to collect interest or be invested in other positions, thereby earning even more money.