July 3rd, 2025 Option Expiration Results

The Covered Calls Advisor Portfolio had one Covered Call position in Amazon.com Inc. (AMZN) at the July 3rd, 2025 weekly options expiration date and at the $205.00 strike price.  The position closed in-the-money yesterday at $223.41 per share, so the Call option expired and the 100 Amazon shares were sold at their $205.00 strike price.  A summary of the results is:

AMZN -- +1.1% absolute return-on-investment (equivalent to +39.1% annualized return-on-investment) for the 10 days of this Covered Calls investment.  The original blog post when this position was established is here. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Covered Call Position Established in Amazon.com Inc.

This morning I established a new Covered Call position in Amazon.com Inc. (ticker AMZN) when my buy/write net debit limit order was executed at a price of $212.40.  One hundred shares were purchased at $221.43 and 1 July 18th, 2025 $215.00 Call option was sold at $9.03 per share.  So, the maximum potential time value profit if the stock is in-the-money and therefore closed out by assignment on the options expiration date is $2.60 per share [$9.03 Call option premium - ($221.43 stock purchase price - $215.00 strike price)].  The probability that the Call option will be above the $215.00 strike price on the July 18th options expiration date when this Covered Call position was established was 70.0%.

I have another existing Amazon Covered Call position that will expire today on its options expiration date.  Because of my continuing bullish sentiment regarding Amazon's growth prospects, I decided to establish this new position today with an expiration on July 18th (15 calendar days from today). I prefer short-term (less than 30 days duration) positions since: (1) the potential annualized return-on-investment is higher for shorter-duration positions; and (2) short-term positions provide us a more frequent opportunity to re-evaluate the existing positions, so we can react quickly if news causes a substantial stock price volatility decline -- whether bullish or bearish. 

 

Amazon is the leading market cap company in the Consumer Discretionary sector by a very large margin.  JP Morgan's analyst recently noted that Amazon will surpass Walmart this year (for the first time) as #1 in total retail sales in the U.S.  Of course, Amazon also benefits tremendously in the Information Technology sector since its Amazon Web Services (AWS) is the world's #1 cloud computing platform.  

There are 53 Wall Street analysts that cover Amazon.com and their current average target price is $243.78 (+10.1% above today's stock purchase price).   As detailed in the chart below, Amazon passes all 20 criteria in my "Next Year Growth > P/E; and 5-Year PEG Ratio <1.4" stock screener.  Also, the London Stock Exchange Group rates it as an 9 for their Average Score and 10 for Optimized Score (on a scale of 1 to 10).   

As detailed below, a potential return-on-investment result is +1.2% absolute return-on-investment (equivalent to +29.7% annualized return-on-investment for the next 15 days) if the Amazon.com Inc. share price is in-the-money (i.e. above the $215.00 strike price) and the stock is therefore assigned on its July 18th, 2025 options expiration date. 

Amazon.com Inc. (AMZN) -- New Covered Call Position

The net debit buy/write limit order was executed as follows:
7/3/2025 Bought 100 shares of Amazon.com stock @ $221.43 per share.  
7/3/2025 Sold 1 AMZN July 18th, 2025 $215.00 Call option @ $9.03 per share.
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Call was 27.7 when this position was established which, as preferred, is well above the current VIX of 16.5.  

A possible overall performance result (including commissions) if this position is assigned on its 7/18/2025 options expiration date is as follows:
Amazon.com Covered Call Net Investment: $21,240.67
= ($221.43 - $9.03) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$902.33
= ($9.03 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Amazon.com stock is above the $215.00 strike price at the July 18th, 2025 options expiration date): -$643.00
= ($215.00 strike price - $221.43 stock purchase price) * 100 shares

Total Net Profit Potential (If AMZN is in-the-money and therefore assigned at the $215.00 strike price on its 7/18/2025 options expiration date): +$259.33
= (+$902.33 option income + $0.00 dividend income - $643.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.2%
= +$259.33/$21,240.67
Potential Equivalent Annualized-Return-on-Investment: +29.7%
= (+$259.33/$21,240.67) * (365/15 days)  

Established Covered Calls in iShares Bitcoin ETF

This morning I established a short-term Covered Calls position in iShares Bitcoin ETF (ticker IBIT).  My net buy/write limit order at $57.00 was executed by simultaneously purchasing six hundred shares at $60.45 and selling six July 18th, 2025 Call options at the $58.00 strike price at $57.00 per share, which provides a $1.00 per share = [$3.45 Call options premium received - ($60.45 stock purchase price - $58.00 options strike price)] time value profit potential.  A moderately in-the-money Covered Calls positions was established with the probability that the stock will close in-the-money on the options expiration date was 69.0%.  

The iShares Bitcoin ETF (ticker IBIT) is the largest Bitcoin ETF and it provides direct exposure to the spot price of Bitcoin. It was launched in January 2024 as one of the first U.S.-listed spot Bitcoin ETFs approved by the SEC.  IBIT is a good way for us retail investors to gain exposure to Bitcoin since it holds actual Bitcoin in custody (not futures contracts), thus enabling us to gain exposure to Bitcoin’s price movements through a traditional brokerage account without having to buy or store Bitcoin ourselves (and at a reasonably low annual management fee of .25%).      

As detailed below, a potential return-on-investment result is +1.7% absolute return-on-investment (equivalent to +37.4% annualized return-on-investment for the next 17 days) if the iShares Bitcoin ETF share price is in-the-money (i.e. above the $58.00 strike price) and therefore assigned on its July 18th, 2025 options expiration date.  

iShares Bitcoin ETF (IBIT) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
7/1/2025 Bought 600 iShares Bitcoin ETF shares at $60.45.

7/1/2025 Sold 6 IBIT 7/18/2025 $58.00 Call options @ $3.45 per share.  The Implied Volatility of these Calls was 37.1% when this position was established.  

A possible overall performance result (including commissions) for this iShares Bitcoin ETF Covered Calls position is as follows:
Covered Calls Net Investment: $34,204.02
= ($60.45 - $3.45) * 600 shares + $4.02 commission

Net Profit:
(a) Options Income: +$2,065.98
= ($3.45 * 600 shares) - $4.02 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 600 iShares Bitcoin ETF shares assigned at the $58.00 strike price at expiration): -$1,470.00
+($58.00 strike price - $60.45 stock purchase price) * 600 shares

Total Net Profit Potential (If 600 IBIT shares in-the-money and therefore assigned at the $58.00 strike price at the options expiration date): +$595.98
= (+$2,065.98 options income + $0.00 dividend income - $1,470.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.7%
= +$595.98/$34,204.02
Potential Annualized Return-on-Investment: +37.4%
= (+$595.98/$34,204.02) * (365/17 days)

Established Covered Calls in Nvidia Corporation

This morning I established a short-term Covered Calls position in Nvidia Corporation (ticker NVDA).  My net buy/write limit order at $150.40 was executed by simultaneously purchasing four hundred shares at $156.37 and selling four July 11th, 2025 weekly Call options at the $152.50 strike price at $59.7 per share, which provides a $2.10 per share = [$5.97 Call options premium received - ($156.37 stock purchase price - $152.50 options strike price)] time value profit potential.  A moderately in-the-money Covered Calls positions was established with the probability that the stock will close in-the-money on the options expiration date was 66.3%.  As preferred, the next earnings report on August 27th, 2025 is after the July 11th options expiration date. 

As detailed below, a potential return-on-investment result is +1.4% absolute return-on-investment (equivalent to +50.8% annualized return-on-investment for the next 10 days) if the Nvidia share price is in-the-money (i.e. above the $152.50 strike price) and therefore assigned on its July 11th, 2025 options expiration date.  

Nvidia Corporation (NVDA) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
7/1/2025 Bought 400 Nvidia Corporation shares at $156.37.

7/1/2025 Sold 4 NVDA 7/11/2025 $152.50 Call options @ $5.97 per share.  The Implied Volatility of these Calls was 34.9% when this position was established.  

A possible overall performance result (including commissions) for this Nvidia Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $60,162.68
= ($156.37 - $5.97) * 400 shares + $2.68 commission

Net Profit:
(a) Options Income: +$2,385.32
= ($5.97 * 400 shares) - $2.68 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 400 Nvidia shares assigned at the $152.50 strike price at expiration): -$1,548.00
+($152.50 strike price - $156.37 stock purchase price) * 400 shares

Total Net Profit Potential (If 400 Nvidia shares in-the-money and therefore assigned at the $152.50 strike price at the options expiration date): +$837.32
= (+$2,385.32 options income + $0.00 dividend income - $1,548.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.4%
= +$837.32/$60,162.68
Potential Annualized Return-on-Investment: +50.8%
= (+$837.32/$60,162.68) * (365/10 days)