Established Covered Calls Position in Pfizer Inc.

Soon after market open this morning (at 9:34a.m.), the Covered Calls Advisors net debit buy/write limit order was transacted in Pfizer Inc. (ticker PFE). Three hundred shares were purchased at $49.06 and three May 20th, 2022 Call options were sold at $2.44 at the $47.00 strike price.  Given the Covered Calls Advisor's current cautious outlook, a moderately in-the-money Covered Calls position was established.  The Delta was 75.8 and this approximates a probability  of 75.8% that the Call options will be in-the-money on the options expiration date. Potential results for this Covered Calls position, as detailed below, includes the possibility of early exercise since Pfizer's May 12th, 2022 ex-dividend is prior to the May 20th options expiration date.  As preferred, there is no quarterly earnings report prior to the options expiration date.

As detailed below, two potential return-on-investment results for this Pfizer Covered Calls position are: +0.8% absolute return (equivalent to +41.7% annualized return-on-investment for the next 7 days) if the stock is assigned early (business day prior to the May 12th ex-dividend date); OR +1.7% absolute return (equivalent to +37.8% annualized return over the next 16 days) if the stock is assigned on the May 20th options expiration date.

Pfizer Inc. (PFE) -- New Covered Calls Position
The buy/write transaction was:
05/05/2022 Bought 300 Pfizer shares @ $49.06
05/05/2022 Sold 3 Pfizer 05/20/2022 $47.00 Call options @ $2.44  Note: the Time Value (aka Extrinsic Value) in the Call options was $.38 per share = [$2.44 Call options premium - ($49.06 stock price - $47.00 strike price)]
05/12/2022 Upcoming quarterly ex-dividend of $.40 per share

Two possible overall performance results (including commissions) for this Pfizer Inc. Covered Calls position are as follows:
Covered Calls Cost Basis: $13,988.01
= ($49.06 - $2.44) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$729.99
= ($2.44 * 300 shares) - $2.01 commission
(b) Dividend Income (If options exercised early on May 11th, 2022 -- the business day prior to the May 12th ex-div date): +$0.00; or
(b) Dividend Income (If Pfizer stock assigned at May 20th, 2022 expiration): +$120.00
= ($.40 dividend per share x 300 shares)

(c) Capital Appreciation (If Pfizer Call options assigned early on May 11th): -$618.00
+($47.00 - $49.06) * 300 shares; or
(c) Capital Appreciation (If shares assigned at $47.00 strike price at options expiration): -$618.00
+($47.00 - $49.06) * 300 shares

1. Total Net Profit (If options exercised on business day prior to May 12th ex-dividend date): +$111.99

= (+$729.99 options income +$0.00 dividend income -$618.00 capital appreciation); or

2. Total Net Profit (If Pfizer shares assigned at $47.00 strike price on May 20th, 2022 options expiration date): +$231.99

= (+$729.99 +$120.00 -$618.00)

1. Absolute Return-on-Investment (If options exercised early on May 11th, 2022): +0.8%

= +$111.99/$13,988.01

Annualized Return-on-Investment (If options exercised early): +41.7%

= (+$111.99/$13,988.01)*(365/7 days); or

2. Absolute Return-on-Investment (If Pfizer shares assigned at $47.00 at May 20th, 2022 options expiration): +1.7%

= +$231.99/$13,988.01

Annualized Return-on-Investment (If Pfizer shares assigned at $47.00 on May 20th, 2022 options expiration): +37.8%

= (+$231.99/$13,988.01)*(365/16 days)

Either outcome provides a satisfactory return-on-investment result for this Pfizer investment.  These returns will be achieved as long as the stock is above the $47.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $46.22 ($49.06 -$2.44 -$.40) provides 5.8% downside protection below today's stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet must be 'YES' prior to establishing a position.  As shown below with this Pfizer position, all nine criteria were 'YES'.