Established Covered Calls Position in Financial Select Sector SPDR Fund

A Covered Calls position has been established in the Financial Select Sector SPDR Fund (ticker XLF) at the $28.00 strike price and for the December 29th, 2017 options expiration date. Today, XLF went ex-distibution at $.1283 per share. Capturing this distribution is included in the potential financial results detailed below. In this case, a slightly out-of-the money strike price was chosen as the stocks of large banks and insurance companies, which are the predominant holdings in the XLF Fund, should benefit from the expected passage next week of the current tax bill.  

As detailed below, two potential return-on-investment results are:

+1.1% absolute return in 16 days (equivalent to a +25.3% annualized return-on-investment) if the price of XLF is unchanged upon the Dec 29th options expiration; OR

+1.8% absolute return in 16 days (equivalent to a +41.3% annualized return-on-investment) if the price of XLF rises to above the $28.00 strike price on the expiration date 

Financial Select Sector SPDR Fund (XLF) -- New Covered Calls Position

The transactions were as follows:
12/14/2017 Bought 1,000 shares of Financial Select Sector SPDR Fund shares @ $27.80 
12/14/2017 Sold 10 XLF Dec 29th, 2017 $28.00 Call options @ $.18 per share
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of these Call options was 14.8 
12/15/2017 Ex-Distribution of $128.30 = $.1283 per share x 1,000 shares

Two possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $27,811.65
= ($27.80 - $.18)* 1,000 shares + $11.65 commission

Net Profit Components:
(a) Options Income: +$180.00
= ($.18* 1,000 shares)
(b) Distribution Income: +$128.30
= $.1283 per share * 1,000 shares 
(c) Capital Appreciation (If XLF is unchanged at $27.80 purchase price at Dec 29th expiration): +$0.00
= ($27.80 -$27.80)* 1,000 shares; OR
(c) Capital Appreciation (If XLF is above $28.00 strike price at Dec 29th expiration): +$195.05
= ($28.00 -$27.80)* 1,000 shares - $4.95 commission

(a) Total Net Profit (If XLF price unchanged at $27.80 at expiration): +$308.30
= (+$180.00 options income +$128.30 distribution income -$0.00 capital appreciation); OR
(b) Total Net Profit (If XLF shares assigned at expiration): +$503.35
= (+$180.00 options income +$128.30 distribution income +$195.05 capital appreciation)

(a) Absolute Return (If XLF price unchanged at expiration): +1.1%
= +$308.30/$27,811.65
Equivalent Annualized Return: +25.3%
= (+$308.30/$27,811.65)*(365/16 days); OR
(b) Absolute Return (If XLF shares assigned at expiration): +1.8%
= +$503.35/$27,811.65
Equivalent Annualized Return: +41.3%
= (+$503.35/$27,811.65)*(365/16 days)

The downside 'breakeven price' at expiration is at $27.4917 ($27.80 price per share - $.18 options income - $.1283 distribution income), which is 1.1% below the current market price of $27.80.