A short-term Covered Calls position was established in NetApp Inc. (ticker NTAP) when the Covered Calls Advisor's buy/write limit order at a net debit limit price of $114.12 was executed. Two hundred shares were purchased at $118.37 and two October 10th, 2025 Call options were sold at $4.25 at the $115.00 strike price. The potential time value profit is $.88 per share = [$115.00 strike price - ($118.37 stock purchase price - $4.25 Call options price)]. A moderately in-the-money Covered Calls position was established with the probability that the position will be assigned on the options expiration date was 73.6% when this position was established. As is my preference, there is no earnings report prior to the options expiration date.
NetApp goes ex-dividend this Friday (on October 3rd) which is exactly one week prior to the options expiration date on October 10th at $.52 per share (a 1.8% annual dividend yield). As detailed at the bottom of this post, this Covered Call meets all nine criteria of my Dividend Capture Strategy (see
here).
As detailed below, two potential return-on-investment results for this NetApp Inc. Covered Calls position is: (1) +0.8% absolute return (equivalent to +69.8% annualized
return-on-investment for the next 4 days) if the stock is assigned early on the day prior to its October 3rd ex-dividend date; OR (2) +1.2% absolute return (equivalent to +40.4% annualized return-on-investment for the next 11 days) if NetApp's stock is assigned on the October 10th, 2025 options expiration date.
NetApp Inc. (NTAP) -- New Covered Calls Position
The buy/write transaction was:
9/29/2025 Bought 200 NetApp Inc. shares @ $118.37
9/29/2025 Sold 2 NTAP 10/10/2025 $115.00 Call options @ $4.25 per share
. The Implied Volatility of these NetApp Call options was 26.0 when this Covered Calls transaction was executed.
Two possible overall performance results (including commissions) for this NetApp Covered Calls position is as follows:
Covered Call Net Investment: $22,825.34
= ($118.37 - $4.25) * 200 shares + $1.34 commission
Net Profit:
(a) Options Income: +$848.66
= ($4.25 * 200 shares) - $1.34 commission
(b) Dividend Income: (If stock assigned early on the day prior to the October 3rd ex-dividend date) = +$0.00; OR
(b) Dividend Income: (If stock assigned on the October 10th option expiration date) = +$104.00
= $.52 per share x 200 shares
(c) Capital Appreciation (If NetApp shares assigned early on the day prior to the October 3rd ex-dividend date): -$674.00
+($115.00 strike price - $118.37 stock purchase price) * 200 shares; OR
(c) Capital Appreciation (If NetApp shares assigned on the Oct. 10th, 2025 options expiration date): -$674.00
= +($115.00 - $118.37) * 200 shares
1. Total Net Profit (If options exercised early): +$174.66
= (+$848.66 options income +$0.00 dividend income - $674.00 capital appreciation)
2. Total Net Profit (If options exercised on the Oct. 10th, 2025 options expiration date): +$278.66
= (+$848.66 options income +$104.00 dividend income - $674.00 capital appreciation)
1. Potential Absolute Return-on-Investment (If the NetApp shares are assigned early on the day prior to the 10/3/2025 ex-dividend date): +0.8%
= +$174.66/$22,825.34
Potential Annualized Return-on-Investment (If 200 NetApp shares assigned at the $115.00 strike price on the Oct. 3rd, 2025 ex-dividend date): +69.8%
= (+$174.66/$22,825.34) * (365/4 days)
2. Potential Absolute Return-on-Investment (If the NetApp shares are assigned at the $115.00 strike price on the 10/10/2025 options expiration date): +1.2%
= +$278.66/$22,825.34
Potential Annualized Return-on-Investment (If 200 NetApp shares assigned at the $115.00 strike price on the Oct. 10th, 2025 options expiration date): +40.4%
= (+$278.66/$22,825.34) * (365/11 days)
My Dividend Capture Strategy chart for this NetApp Inc. position (meets all 9 criteria)
