Established Covered Calls Position in Dell Technologies Inc.

A Covered Calls position was established in Dell Technologies Inc. (DELL) when the Covered Calls Advisor's buy/write limit order at a net debit limit price of $126.70 was executed. Two hundred shares were purchased at $134.00 and two August 2nd, 2024 in-the-money Call options were sold at $7.30 at the $130.00 strike price.  In addition, there is an upcoming ex-dividend of $.445 per share (1.3% annual dividend yield) on July 23rd which is included in the potential annualized-return-on-investment results detailed below.  The Implied Volatility of the Calls was 40.3 and the probability of the Calls expiring in-the-money on the August 2nd options expiration date was 62.1% when this position was established.  Also as desired, the next quarterly earnings report on August 29th is after the August 2nd options expiration date.  The current average target price by the 16 analysts covering Dell is $159.93 which is +19.4% above today's stock purchase price.

The potential return-on-investment result for this Dell Covered Calls position is: +3.0% absolute return-on-investment (equivalent to +63.3% annualized return-on-investment for the next 17 days) if the stock price is in-the-money (i.e. above the $130.00 strike price) on the August 2nd, 2024 options expiration date.

Dell Technologies Inc. (DELL) -- New Covered Calls Position

The buy/write transaction was:
7/16/2024 Bought 200 Dell Technologies Inc. shares @ $134.00
7/16/2024 Sold 2 DELL 8/2/2024 $130.00 Call options @ $7.30 per share.
7/23/2024 Ex-dividend of $.445 per share.

A possible overall performance result (including commissions) for this DELL Covered Calls position is as follows:
Covered Calls Net Investment: $25,341.34
= ($134.00 - $7.30) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$1,458.66
= ($7.30 * 200 shares) - $1.34 commission
(b) Dividend Income:  +$89.00
= ($.445 dividends per share x 200 shares)
(c) Capital Appreciation (If Dell stock price is above the $130.00 strike price on the 8/2/2024 options expiration date): -$800.00

= ($130.00 stock selling price on expiration date - $134.00 stock purchase price) x 200 shares

Total Net Profit (If stock price is above the $130.00 strike price on the 8/2 options expiration date): +$747.66

= (+$1,458.66 options income +$89.00 dividend income -$800.00 capital appreciation)

Potential Absolute Return-on-Investment (If stock price increases to above the $130.00 strike price on the 8/2 options expiration date): +3.0%

= (+$747.66/$25,341.34)

Potential Equivalent Annualized Return-on-Investment: +63.3%

= (+$747.66/$25,341.34) * (365/17 days)