As described in previous blog posts about Uber, it has a bright future as the pre-eminent rideshare company in North America (58% of revenue) and also a substantial worldwide presence in over 70 countries with good ongoing growth prospects.
As detailed below, a potential outcome for this Uber Technologies investment is +2.2% absolute return-on-investment for the next 19 days (equivalent to +42.1% annualized-return-on-investment) if the stock closes above the $30.00 strike price on the April 21st, 2023 options expiration date.
Uber Technologies Inc. (UBER) -- New Covered Calls Position
The net debit buy/write limit order was executed as follows:
4/3/2023 Bought 500 shares of Uber Technologies Inc. stock @ $31.36 per share
4/3/2023 Sold 5 Uber April 21st, 2023 $30.00 Call options @ $2.01 per share
Note: The Implied Volatility of the Calls was 42.4 when this position was established, an attractive level given there is no earnings report prior to the options expiration date.
A possible overall performance result (including commissions) if this position is assigned on its April 21st options expiration date is follows:
Covered Calls Net Investment: $14,678.35
= ($31.36 - $2.01) * 500 shares + $3.35 commission
Net Profit Components:
(a) Options Income: +$1,001.65
= ($2.01 * 500 shares) - $3.35 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Uber stock is above the $30.00 strike price and therefore assigned at the April 21st options expiration): -$680.00
= ($30.00 -$31.36) * 500 shares
Potential Total Net Profit (If assigned at expiration): +$321.65
= (+$1,001.65 options income +$0.00 dividend income -$680.00 capital appreciation)
Potential Absolute Return-on-Investment: +2.2%
= +$321.65/$14,678.35
Potential Equivalent Annualized-Return-on-Investment: +42.1%
= (+$321.65/$14,678.35) * (365/19 days)
