ARO - Closed

The ARO Jan07 30 Call was exercised and the stock was called away for a profit. The following is the trade history and returns, including IB commissions.

Covered Call Results

Stock Investment: $3,092.00
Income Generated: $572.00
Net Profit: $480.00
Percent Return: 15.52%
Annualized Return: 18.58%
Duration of Trade: 305 days

Buy & Hold Comparison

Opening Price: $30.92
Closing Price: $35.80
P/L per Share: $4.88
Shares: 100
Dividends: $0.00
Net Profit: $488.00
Percent Return: 15.78%
Annualized Return: 18.89%
Duration of Trade: 305 days

Trade History:

20-Mar-06 - Initial Stock Position - BTO 100 ARO @ 30.92 -
20-Mar-06 - Initial Call Option - STO 1 Jul06 30.00 Call @ 3.19 - Expired
24-Jul-06 - Continued Trade - STO 1 Aug06 30.00 Call @ 1.29 - Expired
28-Aug-06 - Continued Trade - STO 1 Jan07 30.00 Call @ 1.24 - Exercised
19-Jan-07 - Option Exercised - EX 1 Jan07 30.00 Call @ 30.00 -

The return on this position was almost identical to the buy & hold return. However, with buy & hold I would've had to wait the entire 305 days to receive the profit, but with a covered call I received income of $572 long before the position was closed. That income was then reinvested into other positions, thereby compounding the returns.