Position Closed in Bristol-Myers Squibb Co.

This morning, the Covered Calls Advisor decided to close the existing Bristol-Myers Squibb Co. (ticker symbol BMY) Covered Calls position. The next quarterly earnings is this Thursday and it was determined that not holding the position on the earnings date was the most prudent decision, so the position was closed out.  This BMY holding was the one July 19th, 2019 Covered Calls position in the Covered Calls Advisor Portfolio that was not assigned at options expiration last Friday.     

As detailed below, the result was a +0.6% absolute return-on-investment (equivalent to +8.2% on an annualized basis) for the 26 days this position was held.


Bristol-Myers Squibb Co. (BMY) -- Covered Calls Position Closed

The buy/write transaction was:
06/26/2019 Bought 200 Bristol-Myers shares @ $45.08
06/26/2019 Sold 2 BMY 7/19/2019 $44.00 Call options @ $1.47
Note: the Open Interest in these Call options was 223 contracts and the Implied Volatility was 23.8 when this transaction was executed.
07/03/2019 Quarterly ex-dividend of $.41 per share
07/19/2019 BMY shares closed at $43.33 which was below the $44.00 strike price, so Call options expired and 200 shares of BMY stock were retained in the Covered Calls Advisor Portfolio
07/22/2019 Sold 200 shares BMY stock at $43.48 to close out position

The overall performance result (including commissions) for this Bristol-Myers Covered Calls position was as follows:
Covered Calls Cost Basis: $8,728.29
= ($45.08 - $1.47) * 200 shares + $6.29 commissions

Net Profit Components:
(a) Options Income: +$294.00
= ($1.47 * 200 shares)

(b) Dividend Income: +$82.00
= ($.41 dividend per share x 200 shares)

(c) Capital Appreciation: -$324.95
+($43.48 -$45.08)* 200 shares - $4.95 commissions

Total Net Profit: +$51.05

= (+$294.00 options income +$82.00 dividend income -$324.95 capital appreciation)

Absolute Return: +0.6%

= +$51.05/$8,728.29

Annualized Return: +8.2%

= (+$51.05/$8,728.29)*(365/26 days)