Established Covered Calls in Kohl's Corporation

Late this afternoon, a Covered Calls position was established in Kohl's Corporation (ticker KSS) when the Covered Calls Advisor's buy/write limit order for the December 16th, 2022 $30.00s executed at a net debit price of $29.40.  Four hundred KSS shares were purchased at $31.98 and 4 December 16th, 2022 $30.00 Calls were sold at $2.58 per share.  So, the corresponding time value (aka extrinsic value) was $.60 per share = [$2.58 Call options premium - ($31.98 stock purchase price - $30.00 strike price)].  Given the Covered Calls Advisor's current cautious Overall Market Meter outlook, a moderately in-the-money Covered Call position was established--the Delta was 71.4, which closely approximates the probability that the Call options will be in-the-money on the options expiration date.  In addition, the Implied Volatility of the Calls was 48.0 when the position was established which, as desired, was above the VIX which was at 20.5. 

Kohl's goes ex-dividend at $.50 per share (6.3% annualized dividend yield at the current stock price) on December 6th, 2022, so this dividend is included in the potential return-on-investment results shown below.  There is no earnings report prior to the options expiration date.

Two potential return-on-investment results for this Kohl's Covered Calls position are: (a) +2.0% absolute return (equivalent to +67.3% annualized return for the next 11 days) if the stock is assigned early [i.e. on December 5th which is the last trading day prior to the December 6th ex-dividend date]; OR (b) +3.7% absolute return (equivalent to +61.9% annualized return over the next 22 days) if the stock is assigned on its December 16th, 2022 options expiration date. 

Kohl's Corporation (KSS) -- New Covered Calls Position
The simultaneous buy/write transactions was as follows:
11/25/2022 Bought 400 shares of Kohl's Corporation stock @ $31.98 per share 
11/25/2022 Sold 4 Kohl's Dec. 16th, 2022 $30.00 Call options @ $2.58 per share
12/6/2022 Upcoming ex-dividend at $.50 per share

The overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $11,761.34
= ($31.98 - $2.58) * 400 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,030.66
= ($2.58 * 400 shares) - $1.34 commission
(b) Dividend Income (If Kohl's stock assigned on the Dec. 6th ex-dividend date): $0.00
(b) Dividend Income (If Kohl's stock assigned on the December 16th options expiration date): +$200.00
= $.50 dividend per share x 400 shares
(c) Capital Appreciation (If Kohl's stock assigned on the 12/6/2022 ex-dividend date): -$792.00
= ($30.00 - $31.98) * 400 shares
(c) Capital Appreciation (If KSS stock is above $30.00 strike price and therefore assigned at the December 16th expiration): -$792.00
= ($30.00 - $31.98) * 400 shares

1. Potential Net Profit (If Kohl's shares assigned early on 12/5/2022, the day prior to the December 6th ex-dividend date): +$238.66
= (+$1,030.66 options income +$0.00 dividend income - $792.00 capital appreciation)
2. Potential Net Profit (If Kohl's stock price is above $30.00 strike price at the Dec.16th options expiration): +$438.66
= (+$1,030.66 options income +$200.00 dividend income - $792.00 capital appreciation)

1. Absolute Return-on-Investment (If Kohl's shares assigned on 12/5/2022, the day prior to the December 6th, 2022 ex-dividend date): +2.0%
= +$238.66/$11,761.34
Equivalent Annualized Return-on-Investment (If assigned early on day prior to ex-div date): +67.3%
= (+$238.66/$11,761.34 ) * (365/11 days)
2. Absolute Return-on-Investment (If KSS share price is above $30.00 strike price at the December 16th options expiration): +3.7%
= +$438.66/$11,761.34
Equivalent Annualized Return-on-Investment (If Kohl's shares assigned on the 12/16/2022 options expiration date): +61.9%
= (+$438.66/$11,761.34) * (365/22 days)

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet (see below) must be 'YES' prior to establishing a new Covered Calls position using the Covered Calls Advisor's Dividend Capture strategy.  As shown below, all nine criteria are achieved for this Kohl's Corporation Covered Calls position.