Soon after the market opened today, a short-term Covered Calls position was established in Mosaic Inc. (ticker symbol MOS) when the Covered Calls Advisor's buy/write limit order was executed -- 300 shares were purchased at $52.60 and 3 September 16th, 2022 $50.00 Call options were sold at $3.52 per share. This position is a replacement in the Materials Sector for the Cleveland-Cliffs position that was assigned last Friday upon its options expiration date. Mosaic appeared in my Materials Sector stock screener and analysts' average target price is $69.09 (+31.3% above today's purchase price).
Given the Covered Calls Advisor's current cautious Overall Market Meter outlook, a moderately in-the-money Covered Calls position was
established -- the Delta was 69.7, which closely approximates the probability
that the Call option will be
in-the-money on the options expiration date. In addition, the Implied Volatility of the Calls was high at 55.3 when the position was established, so the potential annualized return-on-investment of +67.9% if assigned at expiration (as shown below) would be a very attractive outcome. There is no quarterly earnings report or ex-dividend date prior to the September 16th options expiration date.
Some key numbers for this Mosaic Inc. Covered Calls position are:
Covered Call Cost Basis: $14,726.01
Profit if Assigned on Expiration Date: $273.99
Days Until Expiration: 10
Absolute Return-on-Investment if Assigned at 9/16/2022 Options Expiration Date: +1.9%
Annualized Return-on-Investment if Assigned at 9/16/2022 Options Expiration Date: +67.9%
As always, I encourage your email questions related to the Covered Calls investing strategy.
Regards and Godspeed,
Jeff Partlow (The Covered Calls Advisor)
partlow@cox.net
