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COVERED CALL RETURN CALCULATOR

(SEE INSTRUCTIONS BELOW)


Sample A Sample B Stock A

Stock Symbol Expiry Month Option Symbol Total Commissions Total Dividends PER SHARE STRIKE Price STOCK Price Call PREMIUM DAYS to Expiration Number of SHARES Net / Debit price * Number of call contracts to sell Net initial investment

(fill in optional) (fill in optional) (fill in optional) (fill in optional) (fill in optional) (required) (required) (required) (required) (required)

RIO MAR RIOCJ 45.00 50.00 48.85 2.20 39 100 46.65 1 $ 4,665 N/A N/A N/A 4.5% 42.1% 7.2% 67.2% 220.00 175.00 3.6% 33.5%

BHP MAY 0.75 35.00 38.80 4.90 99 100 33.90 1 $ 3,390 3.2% 12.0% 12.6% N/A N/A N/A N/A 110.00 185.00 5.5% 20.1%

TDC AUG TDCJ 20.00 55.00 54.83 2.00 22 100 52.83 1


5,283

Returns on In-The-Money Calls * ITM simple return CALLED ITM Annualized Return Downside protection Returns on Out-Of-The-Money Calls * OTM uncalled return OTM uncalled return annualized OTM Return Called OTM return Called Annualized Gross Profit Net Profit Net Profit % Annualized Net Profit %

N/A N/A N/A 3.6% 60.5% 4.1% 68.1%


200 180

3.3% 54.5%

CALCULATOR COPYRIGHT 2006 by Jack Adamo. All Rights Reserved. Licensed free for personal, non-professional use. INSTRUCTIONS This calculator may be used to figure "from scratch" the return a covered call offers, given the current stock and premium price. Fill in the required boxes under "Stock A" or "Stock B," then look at the profits as they appear below. SUBSCRIBERS: See if you will get the recommended "Net/Debit" price and protection given the current stock price and option premium by filling in the required boxes under "Stock A" or "Stock B." Then look at the row marked "Net/Debit." As long as the Net/Debit price is at or below the maximum recommended price, AND THE PROFIT AND DOWNSIDE PROTECTION IS SIMILAR to what it was at the original recommendation, the recommendation should still be profitable. In OTM calls, the downside protection equals the call premium. "Out-of-the-money" refers to calls where the strike price is above the current stock price. "In-the-money" refers to calls where the strike price is below the current stock price. * NOTE: Only the Blue cells in bold type at the bottom of the grid factor commission costs and dividends into returns. Returns on OTM calls in bold type assume option not called. For approximate return if called, see pink section.

Stock B

N/A N/A N/A N/A N/A N/A N/A


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#DIV/0! #DIV/0!

, non-professional use.

nt stock and ey appear below. rent stock price and arked "Net/Debit." AND DOWNSIDE uld still be profitable.

ends into returns.