Established New Covered Calls Position in Alibaba Group Holding Ltd.

Yesterday, a new Covered Calls position was established in Alibaba Group Holding Ltd. with an October 19th, 2018 options expiration date. Despite the large decline in the stock market for the past two days, the Covered Calls Advisor remains bullish on Alibaba's long-term prospects and intends to continue the pattern of prior months by establishing Covered Calls positions in Alibaba. 

As detailed below, two potential return-on-investment results are: (1) +1.3% absolute return in 9 days (equivalent to a +54.7% annualized return-on-investment) if the stock closes at $139.74 (same as the purchase price); and (2) +5.1% absolute return in 9 days (equivalent to a +208.6% annualized return-on-investment) if the stock closes above the $145.00 strike price on the Oct. 19th options expiration date.  

Today's transactions and two potential results are detailed below:

1. Alibaba Group Holding Ltd. (BABA) -- New Covered Calls Position

The transactions were as follows:
10/11/2018 Bought 200 shares of Alibaba stock @ $139.74 per share 
10/11/2018 Sold 2 Alibaba Oct 19th, 2018 $145.00 Call options @ $1.86 per share
Note: this was a simultaneous Buy/Write transaction

There are a multitude of possible outcomes, but two possible overall performance results (including commissions) are as follows:
Covered Calls Cost Basis: $27,582.29
= ($139.74 - $1.86)* 200 shares + $6.29 commission

Net Profit Components:
(a) Options Income: +$372.00
= ($1.86* 200 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If BABA stock price remains unchanged at $139.74 strike price at Oct 19th expiration): +$0.00
= ($139.74 -$139.74)* 200 shares; OR
(c) Capital Appreciation (If BABA stock is above $145.00 strike price at Oct 19th expiration): +$1,047.05
= ($145.00 -$139.74)* 200 shares - $4.95 commission

(a) Total Net Profit (If stock price unchanged at $139.74 at Oct. 19th options expiration): +$372.00
= (+$372.00 options income +$0.00 dividend income +$0.00 capital appreciation); OR
(b) Total Net Profit: +$1,419.05
= (+$372.00 options income +$0.00 dividend income +$1,047.05 capital appreciation)

(a) Absolute Return: +1.3%
= +$372.00/$27,582.29
Equivalent Annualized Return: +54.7%
= (+$372.00/$27,582.29)*(365/9 days); OR
(b) Absolute Return: +5.1%
= +$1,419.05/$27,582.29
Equivalent Annualized Return: +208.6%
= (+$1,419.05/$27,582.29)*(365/9 days)

The downside 'breakeven price' at expiration is at $137.88 ($139.74 - $1.86), which is 1.3% below the current market price of $139.74.