Continuation of Covered Calls Position in Schlumberger Ltd

The Covered Calls Advisor Portfolio has a Covered Calls position in Schlumberger Ltd. (now SLB) with 300 shares and 3 Call options at the $50.00 strike price scheduled to expire today.  The stock was at $48.57 with less than 30 minutes remaining until the market close today when my net credit limit order at $.69 per share was executed to roll out the Covered Calls to the same $50.00 strike price at the June 21st, 2024 monthly options expiration date.  The Implied Volatility of the 6/21/2024 Calls was 20.3 when this transaction occurred, and the probability that the Calls will expire in-the-money and therefore be assigned on their 6/21 options expiration date was 33.8%. 

As detailed below, a potential outcome for this SLB investment if the stock is in-the-money and therefore assigned on the options expiration date is +0.7% absolute return-on-investment over 87 days (equivalent to +3.0% annualized-return-on-investment) if the stock closes above the $50.00 strike price on the June 21st, 2024 options expiration date.  The transactions history of this SLB Covered Calls position so far along with a potential return-on-investment result if the stock is assigned on the June 21st options expiration date is as follows:

Schlumberger Ltd. (SLB) -- Continuation of Covered Calls Position

The net debit buy/write limit order was executed as follows:

3/26/2024 Bought 300 shares of SLB stock @ $54.08 per share.  
3/26/2024 Sold 3 SLB April 19th, 2024 $52.50 Call options @ $2.48 per share.  Note: the Implied Volatility of the Calls was 26.3 when this position was established.  
4/19/2024 300 SLB shares closed out-of-the-money so 3 Calls expired and 300 SLB shares remain in the Covered Calls Advisor Portfolio.
4/23/2024 Continued Covered Calls position by selling 3 SLB 5/3/2024 Call options at the $50.00 strike price for $.76 per share when the stock price was $49.65.

5/3/2024 Three SLB Calls closed out-of-the-money at $47.77 on their options expiration date, so the Call expired and 300 SLB shares remain in the Covered Calls Advisor Portfolio.

5/6/2024 This SLB Covered Calls position was continued by selling 3 May 17th, 2024 $50.00 Calls at $.27 per share when the stock was trading at $48.25. 

5/17/2024 Rolled out the 3 SLB 5/17/2024 $50.00 Calls to 3 6/21/2024 $50.00 Calls at a net credit of $.67 per share.
6/5/2024 Upcoming ex-dividend of $.275 per share. 

A possible overall performance result (including commissions) for this position if it is in-the-money on the options expiration date is as follows:
Covered Calls Net Investment: $15,482.01
= ($54.08 - $2.48) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,251.96
= ($2.48 + $.76 + $.27 -$.01 + $.70) * 300 shares - $8.04 commissions
(b) Dividend Income: +$82.50
= $.275 per share x 300 shares
(c) Capital Appreciation (If SLB stock is above the $50.00 strike price at the June 21st, 2024 options expiration date): -$1,224.00
= ($50.00 strike price - $54.08 stock purchase price) * 300 shares

Potential Total Net Profit (If SLB is in-the-money and therefore assigned at expiration): +$110.46
= (+$1,251.96 options income + $82.50 dividend income - $1,224.00 capital appreciation)

Potential Absolute Return-on-Investment (If stock price is in-the-money and therefore assigned on the 6/21/2024 options expiration date): +0.7% = +$110.46/$15,482.01

Potential Equivalent Annualized-Return-on-Investment: +3.0%
= (+$110.46/$15,482.01) * (365/87 days)

Jeff Partlow (The Covered Calls Advisor)

partlow@cox.net