Covered Calls Position Established in Zimmer Integrated Shipping Services Ltd.

This afternoon, a Covered Calls position was established in Zimmer Integrated Shipping Services Ltd. (ticker symbol ZIM) when two hundred Zimmer Shipping Services shares were purchased at $53.85 and two December 17th, 2021 Call options were sold for $5.11 per share at the $50.00 strike price.  The  buy/write net debit limit order at $48.74 was executed, so the time value was $1.26 per share [$5.11 Call options premium - ($53.85 stock purchase price - $50.00 strike price)].  There is an upcoming special ex-dividend of $2.50 on December 15th, 2021 -- so potential return-on-investment results for this position, as detailed below, include the possibility of early assignment because the ex-dividend is prior to the December 17th, 2021 options expiration date.  

Given the Covered Calls Advisor's current Overall Market Meter indicator of Slightly Bearish, an in-the-money Covered Calls position was established with a Delta of approximately 69.8 and an Implied Volatility of the Calls was approximately 70.4 when the buy/write limit order was executed.   

Zimmer Integrated Shipping Services Ltd. reported their Q3 2021 earnings about two weeks ago and they beat analysts estimates for Q3 2021 earnings by +31.4% while setting a company record for quarterly revenue of $3.1 billion.  The average target price for the five analysts currently following the company's stock is $73.33 which is +36.2% above today's purchase price.  ZIM's valuation is incredibly low since its current full fiscal year P/E ratio is now estimated at 2.0.  

As detailed below, a potential return-on-investment result is +2.6% absolute return (equivalent to +67.4% annualized return for the next 14 days) if the stock is assigned early on December 14th (the last business day prior to the December 15th ex-date); OR +7.7% absolute return (equivalent to +165.6% annualized return over the next 17 days) if the stock is assigned on the December 17th, 2021 options expiration date.

Zimmer Integrated Shipping Services Ltd. (ZIM) -- New Covered Calls Position
The transaction today was as follows:
12/01/2021 Bought 200 Zimmer Integrated Shipping Services Ltd. shares @ $53.85
12/01/2021 Sold 2 Zimmer 12/17/2021 $50.00 Call options @ $5.11
12/15/2021 Upcoming special ex-dividend of $2.50 per share

Two possible overall performance results (including commissions) for this Zimmer Covered Calls position are as follows:
Covered Calls Cost Basis: $9,749.34
= ($53.85 - $5.11) * 200 shares + $1.34 commissions

Net Profit Components:
(a) Options Income: +$1,022.00
= ($5.11 * 200 shares) - $3.35 commissions
(b) Dividend Income (If option exercised early on the business day prior to the Dec. 15th ex-div date): +$0.00; or
(b) Dividend Income (If Zimmer shares assigned at Dec. 17th, 2021 options expiration): +$500.00
= ($2.50 dividend per share x 200 shares)
(c) Capital Appreciation (If Zimmer Shipping Services shares assigned early on Dec. 14th): -$770.00
+($50.00 - $53.85) * 200 shares ;or
(c) Capital Appreciation (If ZIM shares assigned at $50.00 strike price at options expiration): -$770.00
+($50.00 - $53.85) * 200 shares

1. Total Net Profit [If options exercised on Dec. 14th (business day prior to the Dec. 15th ex-dividend date)]: +$252.00

= (+$1,022.00 options income +$0.00 dividend income - $770.00 capital appreciation); or

2. Total Net Profit (If Zimmer Shipping shares assigned at $50.00 strike price at Dec. 17th, 2021 expiration): +$752.00

= (+$1,022.00 + $500.00 - $770.00)

1. Absolute Return [If Zimmer Call options exercised on final business day prior to ex-dividend date]: +2.6%

= +$252.00/$9,749.34

Annualized Return (If options exercised early): +67.4%

= (+$252.00/$9,749.34) * (365/14 days); or

2. Absolute Return (If ZIM shares assigned at $50.00 strike price on Dec. 17th, 2021 expiration): +7.7%

= +$752.00/$9,749.34

Annualized Return (If ZIM stock assigned at $50.00 at Dec. 17th, 2021 expiration): +165.6%

= (+$752.00/$9,749.34) *(365/17 days)

The Covered Calls Advisor has established a set of nine criteria to evaluate potential Covered Calls using a Dividend Capture Strategy.  The minimum threshold desired to establish a position is that at least eight of these nine criteria must be achieved.  As shown in the table below, eight of the nine criteria are met for this Zimmer Integrated Shipping Services Ltd. Covered Calls position.