As detailed below, a +1.4% absolute
return in 17 days (equivalent to a +30.7% annualized
return-on-investment) was achieved for this position.
Citigroup Inc. (C) -- Covered Calls Position Closed Out by Early Assignment
The transactions were:
07/13/2021 Bought 200 Citigroup shares @ $68.12
07/13/2021 Sold 2 Citigroup 8/6/2021 $66.00 Call options @ $3.05
Note: the Implied Volatility of these Call options was 26.3 when this position was established.
07/29/2021 Two Citigroup Call options exercised early, so Call options expired
and 200 shares of Citigroup stock were sold at the $66.00 strike price.
The overall performance results (including commissions) for this
Citigroup Covered Calls position were as follows:
Covered Calls Cost Basis: $13,015.34
= ($68.12 - $3.05) *200 + $1.34 commission
Net Profit Components:
(a) Options Income: +$610.00
= ($3.05 *200 shares)
(b) Dividend Income (If option exercised early on the business day prior to the ex-div date): +$0.00
(c) Capital Appreciation (If Citigroup shares assigned early): -$424.00
+($66.00 strike price -$68.12 stock purchase cost) *200 shares
