Final Results of My Nutrisystems Covered Call

As anticipated from my second post in this trilogy, my Nutrisystems, Inc. (NTRI) Covered Call strategy resulted in 30% loss protection strategy against a buy and hold approach.

Just in case, here are the first two links for the entire NTRI Covered Call Trilogy:

Post 1
Post 2

On August 17th, NTRI closing stock price was $49.61. This represents a –22.2% decline vs. the stock price before the earnings release, the day I initiated the NTRI covered call strategy. If you were to execute this trade, you would have minimized your loss by 30%.

Buy and Hold Strategy
Buy 500 shares on July 24th, 2007 at $63.78/share
Value of holdings at close of day on August 17th was $24,805
Total Loss of -$7,095 or –22.2%

Covered Call Strategy
Buy 500 shares on July 24th, 2007 at $63.78/share
Sell 5 Aug 07 Call Options at $4.25 each
Adjusted Basis for Call Option Premium incl. Commission costs of $59.59/share
Value of holdings at close of day on August 17th was $24,805
Total Loss of -$4,990 or –15.6% from original purchase

If you have been successful with this strategy, please let me know.

NTRI 1-yr chart

Disclosure: Author does not own any securities, NTRI equity or options, mentioned in this article.