Established Covered Calls Position in The Walt Disney Company

A Covered Calls position was established in The Walt Disney Company (DIS) when the Covered Calls Advisor's buy/write limit order at a net debit limit price of $96.55 was executed. Two hundred shares were purchased at $97.58 and two July 19th, 2024 out-of-the-money Call options were sold at $1.03 at the $100.00 strike price.  In addition, there is an upcoming semi-annual ex-dividend of $.45 per share on July 8th which is included in the potential annualized-return-on-investment results detailed below.  Also as desired, the next quarterly earnings report on August 7th is after the July 19th options expiration date.  The current average target price by the 27 analysts covering Disney is $127.63 which is +30.8% above today's stock purchase price.

Two potential return-on-investment results for this Disney Covered Calls position are: (1) +1.5% absolute return-on-investment (equivalent to +32.8% annualized return-on-investment for the next 17 days) if the stock price is unchanged at $97.58 on the options expiration date; and (2) +4.0% absolute return-on-investment (equivalent to +86.6% annualized return-on-investment for the next 17 days) if the stock price increases and is in-the-money (i.e. above the $100.00 strike price) on the July 19th, 2024 options expiration date.

The Walt Disney Company (DIS) -- New Covered Calls Position

The buy/write transaction was:
7/2/2024 Bought 200 The Walt Disney Company shares @ $97.58
7/2/2024 Sold 2 DIS 7/19/2024 $100.00 Call options @ $1.03 per share.
7/8/2024 Ex-dividend of $.45 per share.

Two possible overall performance results (including commissions) for this Disney Covered Calls position are as follows:
Covered Calls Net Investment: $19,311.34
= ($97.58 - $1.03) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$204.66
= ($1.03 * 200 shares) - $1.34 commission
(b) Dividend Income:  +$90.00
= ($.45 dividends per share x 200 shares)
(c) Capital Appreciation (If DIS stock price unchanged at $97.58 on the 7/19/2024 options expiration date): +$0.00
+($97.58 price unchanged on options expiration date - $97.58 stock purchase price) * 200 shares; OR

(c) Capital Appreciation (If DIS stock price is above the $100.00 strike price on the 7/19/2024 options expiration date): $484.00

= ($100.00 stock selling price on expiration date - $97.58 stock purchase price) x 200 shares

1. Total Net Profit (If stock price unchanged on the 7/19/2024 options expiration date): +$294.66

= (+$204.66 options income +$90.00 dividend income +$0.00 capital appreciation); OR

2. Total Net Profit (If stock price increases to above the $100.00 strike price on the 7/19 options expiration date): +$778.66

= (+$204.66 options income +$90.00 dividend income +$484.00 capital appreciation)

1. Potential Absolute Return-on-Investment (If stock price unchanged at $97.58 on the 7/19/2024 options expiration date): +1.5%

= (+$294.66/$19,311.34)

Potential Equivalent Annualized Return-on-Investment: +32.8%

= (+$294.66/$19,311.34) * (365/17 days); OR

2. Potential Absolute Return-on-Investment (If stock price increases to above the $100.00 strike price on the 7/19 options expiration date): +4.0%

= (+$778.66/$19,311.34)

Potential Equivalent Annualized Return-on-Investment: +86.6%

= (+$778.66/$19,311.34) * (365/17 days)

Continuation of Covered Call Position in CBOE Global Markets Inc.

The Covered Calls Advisor Portfolio has a Covered Call position in CBOE Global Markets Inc. (ticker CBOE) at the $175.00 strike price which expired out-of-the-money on its Friday, 6/21/2024 options expiration date.  Today this position was continued by rolling out to the July 19th, 2024 monthly options expiration at the $172.50 strike price by selling-to-open one Call at $2.70 per share when the price of CBOE was $171.47.  

As detailed below, a potential outcome for this CBOE Global Markets Inc. investment if the stock is in-the-money and therefore assigned on the options expiration date is +2.3% absolute return-on-investment over 65 days (equivalent to +12.9% annualized-return-on-investment) if the stock closes above the $34.00 strike price on the May 10th, 2024 options expiration date.  The transactions history of this APA Covered Calls position to-date along with a potential return-on-investment result if the stock is assigned on the May 10th, 2024 options expiration date is as follows:

CBOE Global Markets Inc. (CBOE) -- New Covered Call Position
The buy/write transaction was:
5/15/2024 Bought 100 CBOE shares @ $178.50
5/15/2024 Sold 1 CBOE 6/21/2024 $175.00 Call option @ $6.70.  The Implied Volatility of the Call option was 18.4 when this transaction occurred.
5/30/2024 Quarterly ex-dividend of $.55 per share
6/21/2024 CBOE stock price was below the $175.00 strike price, so the Call expired and the 100 CBOE shares remained in the Covered Calls Advisor Portfolio.
7/1/2024 Continued this CBOE Covered Call position by selling one July 19th, 2024 $172.50 Call option @ $2.70 per share when the stock was trading today at $171.47. 

A possible overall performance result (including commissions) for this CBOE Covered Call position is as follows:
Covered Call Net Investment: $17,180.67
= ($178.50 - $6.70) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$938.66
= ($6.70 + $2.70) * 100 shares - $1.34 commissions
(b) Dividend Income ($.55 ex-dividend on 5/30/2024): +55.00
(c) Capital Appreciation (If shares assigned at $172.50 strike price at options expiration): -$600.00 = +($172.50 - $178.50) * 100 shares

Total Net Profit (If CBOE shares assigned at $172.50 at the July 19th expiration): +$393.66

= (+$938.66 option income +$55.00 dividend income -$600.00 capital appreciation)

Absolute Return-on-Investment (If CBOE shares assigned at $172.50 at the July 19th, 2024 options expiration date): +2.3%

= +$393.66/$17,180.67

Equivalent Annualized Return-on-Investment: +12.9%

= (+$393.66/$17,180.67) * (365/65 days)