Continuation of Covered Calls Positions in Oracle Corporation and Schlumberger Ltd.

The Covered Calls positions in Oracle Corporation (ticker ORCL) and Schlumberger Ltd. (ticker SLB) closed out-of-the-money, so the Calls expired and shares remained in the Covered Calls Advisor Portfolio.  This morning, I decided to continue both of these Covered Calls positions by selling Call options to roll out to the May 17th, 2024 monthly options expiration dates. The transactions-to-date for these positions as well as the potential return-on-investment results if these positions are assigned on their May 17th expiration date are as follows:

1. Oracle Corporation (ORCL) -- Continuation of Covered Calls Position

The buy/write transaction was:
4/2/2024 Bought 200 Oracle Corporation shares @ $124.00.
4/2/2024 Sold 2 ORCL 4/19/2024 $121.00 Call options @ $4.02 per share.
Note: the Implied Volatility of the Call options was 17.7 when this buy/write transaction was executed, which (as preferred) is above the 15.2 for VIX.
4/9/2024 Upcoming quarterly ex-dividend of $.40 per share
4/19/2024 200 Oracle Corp. shares closed out-of-the-money so 2 Calls expired and 200 Oracle shares remain in the Covered Calls Advisor Portfolio.
4/23/2024 Continued Covered Calls position by selling 2 Oracle Corp. 5/3/2024 Call options at the $117.00 strike price for $1.17 per share when the stock price was $115.16.

5/3/2024 Two Oracle Calls closed out-of-the-money at $116.38 on their options expiration date, so the Call expired and 200 Oracle shares remain in the Covered Calls Advisor Portfolio.

5/6/2024 This Oracle Corp. Covered Calls position was continued by selling 2 May 17th, 2024 $118.00 Calls at $1.42 per share when the stock was trading at $116.88. 

 

A possible overall performance result (including commissions) for this Oracle Covered Calls position if assigned on its 5/17 options expiration date is as follows:
Covered Calls Net Investment: $23,997.34
= ($124.00 - $4.02) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,317.98
= ($4.02 + $1.17 + $1.42) * 200 shares - $4.02 commissions
(b) Dividend Income: $80.00
= ($.40 dividend per share x 200 shares)
(c) Capital Appreciation (If shares assigned at $118.00 strike price at the 5/17/2024 options expiration date): -$1,200.00
+($118.00 strike price - $124.00 stock purchase price) * 200 shares

Total Net Profit: +$197.98

= (+$1,317.98 options income +$80.00 dividend income -$1,200.00 capital appreciation)

Potential Absolute Return-on-Investment (If ORCL shares assigned at $118.00 at the 5/17/2024 options expiration date): +0.8%

= +$197.98/$23,997.34

Potential Annualized Return-on-Investment: +6.7%

= (+$197.98/$23,997.34) * (365/45 days)

2. 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. 

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: +$1,046.97
= ($2.48 + $.76 + $.27) * 300 shares - $6.03 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If SLB stock is above the $50.00 strike price at the May 17th, 2024 options expiration date): -$1,224.00
= ($50.00 strike price - $54.08 stock purchase price) * 300 shares

Potential Total Net Loss (If SLB is in-the-money and therefore assigned at expiration): -$177.03
= (+$1,046.97 options income + $0.00 dividend income - $1,224.00 capital appreciation)

Potential Absolute Return-on-Investment (If stock price is in-the-money and therefore assigned on the 5/17/2024 options expiration date): -1.1% = -$177.03/$15,482.01

Potential Equivalent Annualized-Return-on-Investment: -8.0%
= (-$177.03/$15,482.01) * (365/52 days)

Jeff Partlow (The Covered Calls Advisor)

partlow@cox.net