Covered Call Part 3: Order
May 14th, 2009
Order placed Monday morning:
2009-May-11
BUY +1,000 USO @ 32.14
SELL -10 USO Oct 09 30 CALL @ 5.00
USO - Risk Profile
Downside Break Even Point
(Net Investment – Dividends) / Shares Held
(27,140 – 0) / 1,000 = 27.14
Percent Downside Protection
(Initial Stock Price – Break Even Price) / Original Stock Price
(32.14 – 27.14) / 32.14 = 15.5%
Return if Unchanged
(Unchanged Stock Value + Dividends – Net Investment) / Net Investment
(32,140 + 0 – 27,140) / 27,140 = 18.4%
