Covered Calls Position Continued in Delta Air Lines Inc.

At the March 16th options expiration, the Covered Calls position in Delta Air Lines Inc. (ticker symbol DAL) expired with the stock price below the $57.50 strike price.  So, the Call options expired and the stock shares were retained in the Covered Calls Advisor's Portfolio.  This afternoon, the Covered Calls Advisor continued this Covered Calls position by selling next month (April 20th, 2018) Call options against the long Delta stock position. 

Some potential return-on-investment results for this position are: 

Delta Air Lines Inc. -- A +0.2% absolute return in 88 days (equivalent to a +0.9% annualized return-on-investment if stock price unchanged at $55.21 at the April 20th expiration; OR a +4.3% absolute return in 88 days (equivalent to a +17.8% annualized return if Delta stock closes above the $57.50 strike price on the April 20th expiration date.

The transactions to-date and two potential return-on-investment results are detailed below.


1. Delta Air Lines Inc. (DAL) -- Covered Calls Position Continued

The detailed transactions and calculations are as follows:
01/23/2018  Bought 400 Delta Air Lines Inc. shares @ $59.63
01/23/2018 Sold 4 DAL Mar 16, 2018 $57.50 Call options @ $3.48
The Call options Open Interest was 7,772 contracts when this position was established and their Implied Volatility was 25.5
Note: this was a simultaneous buy/write transaction.
02/21/2018 $.305 ex-dividend per share
03/16/2018 4 DAL Mar 16th $57.50 Call options expired
03/29/2018 Sold 4 DAL Apr 20, 2018 $57.50 Call options @ $.77 per share
Note: the price of DAL was $55.21 when these Call options were sold

Two possible overall performance results (including commissions) would be as follows:
Cost Basis Purchase of 400 shares DAL: $22,467.63
= ($59.63 -$3.48)*400 shares + $7.63 commissions

Net Profit Components:
(a) Options Income: +$1,700.00
= ($3.48 + $.77) *400 shares
(b) Dividend Income: $122.00
= $.305 per share x 400 shares
(c) Capital Appreciation (If DAL stock price is unchanged at current $55.21 at Apr 20th expiration): -$1,772.95
= ($55.21 -$59.63)* 400 shares - $4.95 commission; OR
(c) Capital Appreciation (If DAL stock closes above $57.50 strike price at expiration) : -$856.95
= ($57.50 -$59.63)* 400 shares - $4.95 commission

Two Net Profit Possibilities:
(a) If Delta stock price is unchanged at current $55.21 at Apr 20th expiration: $49.05
= (+$1,700.00 options income +$122.00 dividends -$1,772.95 capital appreciation); OR
(b) If Delta shares assigned on Apr 20th options expiration date: +$965.05
= (+$1,700.00 options income +$122.00 dividends -$856.95 capital appreciation)

Two Potential Return-on-Investment Results:
(a) If DAL stock price is unchanged at current $55.21 at Apr 20th expiration:
Absolute Return : +0.2%
= +$49.05/$22,467.63
Equivalent Annualized Return: +0.9%
= (+$49.05/$22,467.63)*(365/88 days); OR
(b) If DAL stock price is above $57.50 strike price at Apr 20th expiration:
Absolute Return : +4.3%
= +$965.05/$22,467.63
Equivalent Annualized Return: +17.8%
= (+$965.05/$22,467.63)*(365/88 days)