Established Covered Calls in Wynn Resorts Ltd.

A Covered Calls position was established in Wynn Resorts Ltd. (ticker WYNN) with an October 1st, 2021 options expiration date.   A buy/write transaction entered at a net debit of $73.56 was executed when 300 shares of Wynn Resorts Ltd. were purchased at $79.71 and three October 1st Call options at the $75.00 strike price were sold at $6.15 per share. The Implied Volatility of these Calls increased to 57.0 today when this transaction was executed and the Delta was 73.3 which approximates the probability of the Call options being in-the-money at the options expiration date.   

As detailed below, a potential return-on-investment result is +1.9% absolute return (equivalent to +64.6% annualized return for the next 11 days) if the stock price is in-the-money (i.e. above the $75.00 strike price) and therefore assigned on the October 1st options expiration date.

Wynn Resorts Ltd.(WYNN) -- New Covered Calls Position 

The Buy/Write transaction was as follows:
09/21/2021 Bought 300 shares of Wynn Resorts Ltd. shares @ $79.71 per share 
09/21/2021 Sold 3 WYNN October 1st, 2021 $75.00 Call options @ $6.15 per share

A possible overall performance result (including commissions) for this Wynn Resorts Ltd. Covered Calls position is as follows:
Stock Purchase Cost: $22,070.01
= ($79.71 - $6.15) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$1,842.99
= ($6.15 * 300 shares) - $3.35 commission
(b) Dividend Income: +$0.00

(c) Capital Appreciation (If 300 Wynn Resorts shares assigned at $75.00 strike price at expiration): -$1,413.00
+($75.00 - $79.71) * 300 shares

Total Net Profit (If 300 Wynn Resorts shares assigned at $75.00 strike price at expiration): +$429.99

= (+$1,842.99 options income +$0.00 dividend income -$1,413.00 capital appreciation)

 

Absolute Return-on-Investment: +1.9%

= +$429.99/$22,070.01

Annualized Return-on-Investment: +64.6%

= (+$429.99/$22,070.01) * (365/11 days)