Covered Call Position Established in ServiceNow Inc.

Today a short-term Covered Call position in ServiceNow Inc. (NOW) was established when one hundred shares were purchased at $148.32 and one January 16th, 2026 Call option was sold at $5.20 per share at the $145.00 strike price.  The buy/write net debit limit order at $143.12 was executed, so the time value was $1.88 per share [$5.20 Call option premium - ($148.32 stock purchase price - $145.00 strike price)].  As I prefer, ServiceNow's next quarterly earnings report on January 28th, 2026 is after the January 16th, 2026 options expiration date.  An in-the-money Covered Call position was established with a 66.7% probability of assignment on the options expiration date. 

ServiceNow Inc. is an enterprise software company that provides a cloud-based platform to automate and manage digital workflows, helping organizations streamline processes across IT, HR, customer service, security, and other business functions. Its AI-powered Now platform connects people, data, and workflows to reduce manual work, improve efficiency, and enable digital transformation at scale. ServiceNow’s solutions are widely used by large enterprises globally to break down silos and enable work to flow more smoothly across departments. ServiceNow’s success has been rapid and organic. They offer high-end enterprise-grade solutions and boasts elite-level customer retention of 98%. ServiceNow focuses on the largest enterprises worldwide and these customers continue to renew for larger contracts containing more products. Additionally, customers are re-upping for more than one solution, as more than 75% of customers are multiproduct purchasers, which is driving deal sizes higher.

ServiceNow passed all criteria in my Super Growers stock screener which is shown below.  Furthermore, the average target price of the 40 analysts currently covering the company is +51.7% above today's stock purchase price and it is Buy rated by all four third-party stock research services provided by my broker (Schwab) -- CFRA, Morningstar, Argus, and LSEG.

 As detailed below, a potential return-on-investment result is +1.3% absolute return-on-investment (equivalent to +47.8% annualized return-on-investment over the next 10 days) if the stock is assigned on the January 16th, 2026 options expiration date.

ServiceNow Inc. (NOW) -- New Covered Call Position
The simultaneous buy/write transaction today was as follows:
1/6/2026 Bought 100 ServiceNow Inc. shares @ $148.32
1/6/2026 Sold 1 ServiceNow 1/16/2026 $145.00 Call option @ $5.20 per share
Note: the Implied Volatility of this Call option was 31.4 when this transaction was executed.  As I prefer, this value exceeds that of the S&P 500 Volatility Index (VIX) which is currently at 15.0.

A possible overall performance result (including commissions) for this ServiceNow Covered Call position if assigned on the options expiration date is as follows:
Covered Call Cost Basis: $14,312.67
= ($148.32 - $5.20) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$519.33
= ($5.20 * 100 shares) - $.67 commissions
(b) Dividend Income $0.00
(c) Capital Appreciation (If ServiceNow shares assigned at $145.00 strike price at options expiration): -$332.00
+($145.00 strike price - $148.32 stock purchase price) * 100 shares

Total Net Profit (If ServiceNow shares assigned at the $145.00 strike price at the 1/16/2026 expiration): +$187.33

= (+$519.33 Call option income + $0.00 dividend income - $332.00 capital appreciation)

Absolute Return-on-Investment (If ServiceNow shares assigned at $145.00 strike price on Jan. 16th, 2026 options expiration date): +1.3%

= +$187.33/$14,312.67

Annualized Return-on-Investment (If ServiceNow's stock is assigned at $145.00 at the 1/16/2026 options expiration date): +47.8%

= (+$187.33/$14,312.67) * (365/10 days)

Established Covered Call in NVIDIA Corporation

A third Covered Call position was established yesterday in NVIDIA Corporation (ticker NVDA).  My net buy/write limit order at $176.52 was executed by simultaneously purchasing one hundred shares at $187.67 and selling one January 23rd, 2026 Call option at the $180.00 strike price at $11.15 per share, which provides a $3.48 per share = [$11.15 Call option premium received - ($187.67 stock purchase price - $180.00 option strike price)] time value profit potential.  This new position continues my recent practice of having a NVIDIA Covered Call position expiring each week.  A moderately in-the-money Covered Call position was established for this new position with the probability that NVIDIA's stock will close in-the-money on the 1/23/2026 options expiration date was 67.5% when this transaction was executed.  As I prefer, the next earnings report on February 25th, 2026 is after the January 23rd, 2026 options expiration date. 

As detailed below, a potential return-on-investment result is +2.0% absolute return-on-investment (equivalent to +39.9% annualized return-on-investment for the next 18 days) if NVIDIA's share price is in-the-money (i.e. above the $180.00 strike price) and therefore assigned on its January 23rd, 2026 options expiration date.  

NVIDIA Corporation (NVDA) -- New Covered Call Position

Today's buy/write net limit order transaction was as follows:
1/5/2026 Bought 100 NVIDIA Corporation shares at $187.67.

1/5/2026 Sold 1 NVIDIA 1/23/2026 $180.00 Call option @ $11.15 per share. The Implied Volatility of this Call option was 39.3 when this position was established. 

A possible overall performance result (including commissions) for this NVIDIA Corporation Covered Call position is as follows:
Covered Call Net Investment: $17,652.67
= ($187.67 - $11.15) * 100 shares + $.67 commission

Net Profit:
(a) Option Income: +$1,114.33
= ($11.15 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 100 NVIDIA shares assigned at the $180.00 strike price at expiration): -$767.00
+($180.00 strike price - $187.67 stock purchase price) * 100 shares

Total Net Profit Potential (If 100 NVIDIA shares in-the-money and therefore assigned at the $180.00 strike price at the options expiration date): +$347.33
= (+$1,114.33 option income + $0.00 dividend income - $767.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.0%
= +$347.33/$17,652.67
Potential Annualized Return-on-Investment: +39.9%
= (+$347.33/$17,652.67) * (365/18 days)

Continuation of Covered Calls Position in Generac Holdings Inc.

The Covered Calls Advisor Portfolio has a Covered Calls position in Generac Holdings Inc. (ticker GNRC) which expired last Friday with the stock at $141.10 which was well below the $155.00 strike price.  Today this position was continued by rolling down-and-out to the January 16th, 2026 monthly options expiration date at the $150.00 strike price by selling-to-open two Calls at $3.05 per share when the price of Generac's stock was $147.56.  

As detailed below, a potential outcome for this Generac investment if the stock is in-the-money and therefore assigned on the options expiration date is +1.2% absolute return-on-investment over 32 days (equivalent to +13.9% annualized-return-on-investment) if the stock closes above the $150.00 strike price on the 1/16/2026 options expiration date.   The details showing this potential return-on-investment result are as follows:  

Generac Holdings Inc. (GNRC) -- Continuation of Covered Calls Position

Today's buy/write net limit order transaction was as follows:
12/15/2025 Bought 200 Generac shares at $158.49.

12/15/2025 Sold 2 Generac 1/2/2026 $155.00 Call options @ $7.29 per share.  The Implied Volatility of these Calls was 37.5 when this position was established.  

1/2/2026 Two Generac Calls expired out-of-the-money, so 200 Generac shares remain in the Covered Calls Advisor Portfolio

1/5/2026 Continued this Covered Calls position by selling-to-open two Generac January 16th, 2026 $150.00 Call options at $3.05 per share.  The Implied Volatility of these Calls was 40.8 when they were sold.

A possible overall performance result (including commissions) for this Generac Covered Calls position if the stock is in-the-money and therefore assigned at the $150.00 strike price is as follows:
Covered Calls Net Investment: $30,241.34
= ($158.49 - $7.29) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$2,065.32
= ($7.29 +$3.05) * 200 shares - $2.68 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 200 Generac shares assigned (i.e. above the $150.00 strike price) on the 1/16/2026 options expiration date): -$1,698.00
+($150.00 strike price - $158.49 stock purchase price) * 200 shares

Total Net Profit Potential (If 200 Generac shares assigned at the $150.00 strike price on the 1/16/2026 options expiration date): +$367.32

= ($2,065.32 options income + $0.00 dividend income - $1,698.00 capital appreciation)

Potential Absolute Return-on-Investment (If 200 Generac shares assigned at the $150.00 strike price on the 1/16/2026 options expiration date): +1.2%
= (+$367.32/$30,241.34)

Potential Annualized Return-on-Investment (If 200 Generac shares assigned at the $155.00 strike price on the 1/2/2026 options expiration date): +13.9%
= (+$758.66/$30,241.34) * (365/32 days)

January 2nd, 2026 Options Expiration Results

The Covered Calls Advisor Portfolio had four Covered Calls positions with January 2nd, 2026 options expiration dates.  Two positions (both in NVIDIA Corporation) closed in-the-money so their Calls expired and the shares were called away (i.e. sold) at their respective strike prices.  The other two positions in Generac Holdings Inc. and Microsoft Corporation closed out-of-the-money so their Calls expired and their shares remain in the Covered Calls Advisor Portfolio.  A summary of results for each of these positions is as follows:

1. NVIDIA Corporation (NVDA) -- +11.2% absolute return (equivalent to +95.0% annualized return-on-investment) for the 43 days of this investment.  This Covered Calls position was assigned at the $182.50 strike price since the stock closed in-the-money at $188.85 per share.  The most recent blog post detailing this Covered Calls position is here. 

2. NVIDIA Corporation (NVDA) -- +3.0% absolute return (equivalent to +79.0% annualized return-on-investment) for the 14 days of this investment.  This Covered Call position was assigned at the $180.00 strike price since the stock closed in-the-money at $188.85 per share.  The original blog post detailing this Covered Call position is here. 

3. Generac Holdings Inc. (GNRC) -- This Covered Calls position closed yesterday at $141.10 which was well below its $155.00 strike price, so the two Call options expired and 200 Generac shares now remain in the Covered Calls Advisor Portfolio.  The original blog post detailing this position is here.  Early in this upcoming week I will decide to either continue this Covered Calls position by selling two Call options against the 200 Generac shares currently held or close out the position by selling the 200 shares.   

4. Microsoft Corporation (MSFT) -- This Covered Call position closed yesterday at $472.94 which was below its $487.50 strike price, so the one Call option expired and 100 MSFT shares now remain in the Covered Calls Advisor Portfolio.  The most recent blog post detailing this position is here.  Early in this upcoming week I will decide to either continue this Covered Call position by selling one Call option against the 100 Microsoft shares currently held or close out the position by selling the 100 shares.   

I welcome your feedback at my email address shown below on anything related to the Covered Calls investing strategy.

Wishing You a Happy, Healthy, and Prosperous New Year!

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net