Today a Covered Calls position of two weeks duration was established when my buy/write net debit limit order was executed at a price of $219.84. Two hundred shares of Amazon.com Inc. (ticker symbol AMZN) stock were purchased at $228.31 and 2 September 26th, 2025 $222.50 Call options were sold at $8.47 per share. So, the potential time value profit if the stock is in-the-money and therefore closed out by assignment on the options expiration date is $2.66 per share [$8.47 Call options premium - ($228.31 stock purchase price - $222.50 strike price)]. The probability that the Call option will be above the $222.50 strike price on the Sept 26th options expiration date when this Covered Calls position was established was 69.0%.
At $2.45 trillion, Amazon is the leading market cap company in the Consumer Discretionary sector by a very large margin. Amazon will surpass Walmart this year (for the first time) as #1 in total retail sales in the U.S. Of course, Amazon benefits tremendously in the Information Technology sector as well since it is #1 in revenue as the world's #1 cloud computing platform.
There are 53 Wall Street analysts that cover Amazon.com and their average target price is $264.80 (+16.0% above today's stock purchase price). As detailed in the chart below, Amazon passes all 18 criteria in my "Earnings Growers" stock screener.
As detailed below, a potential return-on-investment result is +1.2% absolute return-on-investment (equivalent to +31.5% annualized
return-on-investment for the next 14 days) if the Amazon.com Inc. share price is in-the-money (i.e. above the $222.50 strike price) and the stock is therefore assigned on its September 26th, 2025 options expiration date.
The net debit buy/write limit order was executed as follows:
9/12/2025 Bought 200 shares of Amazon.com stock @ $228.31 per share.
9/12/2025 Sold 2 AMZN Sept. 26th, 2025 $222.50 Call options @ $8.47 per share.
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Calls was 26.9 when this position was established which, as preferred, is well above the current VIX of 14.6.
A possible overall performance result (including commissions) if this position is assigned on its 9/26/2025 options expiration date is as follows:
Amazon.com Covered Calls Net Investment: $43,969.34
= ($228.31 - $8.47) * 200 shares + $1.34 commission
Net Profit Components:
(a) Option Income: +$1,692.66
= ($8.47 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Amazon.com stock is above the $222.50 strike price at the Sept 26th, 2025 options expiration date): -$1,162.00
= ($222.50 strike price - $228.31 stock purchase price) * 200 shares
Total Net Profit Potential (If AMZN is in-the-money and therefore assigned at the $222.50 strike price on its 9/26/2025 options expiration date): +$530.66
= (+$1,692.66 options income + $0.00 dividend income - $1,162.00 capital appreciation)
Potential Absolute Return-on-Investment: +1.2%
= +$530.66/$43,969.34
Potential Equivalent Annualized-Return-on-Investment: +31.5%
= (+$530.66/$43,969.34) * (365/14 days)
