KOMG - Closed

The KOMG position was closed today for a profit. KOMG was acquired by Western Digital for $32.25/share. The acquisition completed and the stock was sold today at the offer price. The following is the trade history and returns, including IB commissions.

Covered Call Results

Stock Investment: $10,638.00
Income Generated: $1,620.25
Net Profit: $657.25
Percent Return: 6.18%
Annualized Return: 4.01%
Duration of Trade: 562 days

Buy & Hold Comparison

Opening Price: $49.87
Closing Price: $32.25
P/L per Share: -$17.62
Shares: 100
Dividends: $0.00
Net Profit: -$1,762.00
Percent Return: -35.33%
Annualized Return: -22.95%
Duration of Trade: 562 days

Trade History:

20-Mar-06 - Initial Stock Position - BTO 100 KOMG @ 49.87 - Closed
20-Mar-06 - Initial Call Option - STO 1 Apr06 45.00 Call @ 5.93 - Expired
24-Apr-06 - Continued Trade - STO 1 Jun06 45.00 Call @ 2.79 - Expired
26-Jun-06 - Continued Trade - STO 1 Dec06 45.00 Call @ 4.89 - Expired
18-Dec-06 - Continued Trade - STO 1 Jun07 45.00 Call @ 2.69 - Closed
19-Mar-07 - Buy Back - BTC 1 Jun07 45.00 Call @ -0.11 -
19-Mar-07 - Dollar Cost Averaging - BTO 100 KOMG @ 31.64 - Closed
19-Mar-07 - Combined Cost Basis - $8,151.00 200 @ 40.76 -
19-Mar-07 - Continued Trade - STO 2 Jun07 35.00 Call @ 1.29 - Expired
19-Jun-07 - Dollar Cost Averaging - BTO 100 KOMG @ 24.87 -
19-Jun-07 - Combined Cost Basis - $10,638.00 300 @ 35.46 -
19-Jun-07 - Interim Trade - STO 3 Dec07 30.00 Call @ 1.39 - Closed
07-Sep-07 - Closed by Merger - BTC 3 Dec07 30.00 Call @ -2.25 -
03-Oct-07 - Closed by Merger - STC 300 Closed @ 32.25 -

This was one of my oldest positions, and not one of my best. Yet, it still closed at a profit even though the stock declined by over 35% and the company was acquired. This shows the benefit of a covered call over buy & hold on a declining stock. The end result was a small annualized gain, not much better than a money market account. But just like a money market account all my capital was returned plus a small profit. Not great, but not bad either.