Established Covered Calls in Micron Technology Inc.

A Covered Calls position has been established in Micron Technology Inc. (ticker MU) with a July 17th, 2020 options expiration date. Three Micron Technology Call options were sold at $5.90 at the $45.00 strike price when the stock price was $49.72.  The Delta was 76.2 when this transaction was executed -- a moderately in-the-money position which is consistent with the Covered Calls Advisor's current cautious market outlook.

As detailed below, the potential return-on-investment result is +2.7% absolute return in 25 days (equivalent to a +39.3% annualized return-on-investment).  

Micron Technology Inc. (MU) -- New Covered Calls Position

The Buy/Write transaction was as follows:
06/23/2020 Bought 300 shares of Micron Technology Inc. stock @ $49.72 per share 
06/23/2020 Sold 3 Micron July 17th, 2020 $45.00 Call options @ $5.90 per share
Note 1: The Implied Volatility of the Call option was very high at 57.7 which is understandable given the elevated uncertainty related to Micron's upcoming quarterly earnings report on June 29th.
Note 2: The Open Interest was 6,142 contracts when this transaction was executed. 

Two possible overall performance results (including commissions) would be as follows:
Covered Call Cost Basis: $13,148.01
= ($49.72 - $5.90) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,770.00
= ($5.90 * 300 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If Micron stock is above $45.00 strike price at July 17th expiration): -$1,416.00
= ($45.00 - $49.72) * 300 shares

Total Net Profit: +$354.00
= (+$1,770.00 options income +$0.00 dividend income -$1,416.00 capital appreciation)

Absolute Return: +2.7%
= +$354.00/$13,148.01
Equivalent Annualized Return: +39.3%
= (+$354.00/$13,148.01)*(365/25 days)

The downside 'breakeven price' at expiration is at $43.82 ($49.72 - $5.90), which is 11.9% below the current market price of $49.72.