Covered Call Established in Goldman Sachs Group Inc.

Today a Covered Call position was established in Goldman Sachs Group Inc. (ticker symbol GS) when the Covered Calls Advisor's buy/write limit order was executed -- 100 shares were purchased at $334.35 and 1 September 16th, 2022 Call option was sold at $16.83 at the $320.00 strike price. 

There is an upcoming ex-dividend of $2.50 per share (a 3.0% annualized dividend yield) on August 31st (this Wednesday) which is included in the potential return-on-investment results detailed below.  This quarterly dividend provides a 25.0% increase over the dividend rate during the prior year.  Goldman's current valuation metrics are attractive such as its: (1) Current Trailing-Twelve-Months P/E Ratio of 7.6; and (2) Price-to-Tangible-Book-Value of 1.03.  In addition, analysts' current average target price is $394.07 (+17.9% above today's purchase price).  Given the Covered Calls Advisor's current cautious outlook, an in-the-money Covered Calls position was established -- the Delta was 77.2, which approximates the probability that the Call option will be in-the-money on the options expiration date.  Importantly, there is no earnings report prior to the September 16th options expiration date. 

As detailed below, a potential return-on-investment result is +1.6% absolute return (equivalent to +30.1% annualized return for the next 19 days) if the stock is assigned on the September 16th, 2022 options expiration date.

Goldman Sachs Group Inc. (GS) -- New Covered Call Position

The buy/write transaction was as follows:
08/29/2022 Bought 100 shares of Goldman Sachs stock @ $334.35 per share 
08/29/2022 Sold 1 Sept 16th, 2022 $320.00 Call option @ $16.83 per share
Note: The Implied Volatility of the Call option was 26.3.
08/31/2022 Upcoming ex-dividend of $2.50 per share

A possible overall performance result (including commissions) for this Goldman Sachs Covered Call position is as follows:
Covered Call Cost Basis: $31,752.67
= ($334.35 - $16.83) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$1,682.33
= ($16.83 * 100 shares) - $.67 commission
(b) Dividend Income (If Goldman Sachs stock assigned at Sept 16th, 2022 expiration): +$250.00
= ($2.50 dividend per share x 100 shares)

(c) Capital Appreciation (If shares assigned at $320.00 strike price on the options expiration date): -$1,435.00
+($320.00 - $334.35) * 100 shares

Total Net Profit (If Goldman Sachs shares assigned at $320.00 strike price on the Sept 16th, 2022 options expiration date): +$497.33

= (+$1,682.33 options income +$250.00 dividend income -$1,435.00 capital appreciation)
 

Absolute Return-on-Investment (If Goldman Sachs shares assigned at $320.00 at September 16th, 2022 options expiration): +1.6%

= +$497.33/$31,752.67

Annualized Return-on-Investment (If Goldman Sachs shares assigned at $320.00 at Sept. 16th, 2022 expiration): +30.1%

= (+$497.33/$31,752.67) * (365/19 days)