Covered Calls Position Established in Global Payments Inc.

Today a Covered Calls position was established in Global Payments Inc. (ticker GPN) at the September 20th, 2024 options expiration date and at the $105.00 strike price.  Three hundred shares were purchased at $109.22 per share and three September 20th, 2024 $105.00 Calls were sold at $5.58 per share. The corresponding potential time value profit was $1.36 per share [$5.58 Call options premium + ($105.00 strike price - $109.22 stock purchase price)]. 

In addition to the potential time value profit of $1.36 per share, there is an upcoming quarterly ex-dividend prior to the Sept. 20th options expiration date of $.25 per share (0.9% annual dividend yield) on September 13th.  The Implied Volatility of these Call options was 24.8 when this position was established.  Establishing positions in companies when the Implied Volatility of their options is greater than that of the S&P 500 Volatility Index (which is currently at 16.6), is strongly preferred by the Covered Calls Advisor.  This preference is the fifth of the twelve Covered Calls investing "edges" (see here).  Since quarterly earnings reports increase volatility, it is also important to me that there is no earnings report prior to the next earnings report, which is true in this instance since Global Payments' next report is scheduled for October 31st, 2024.  

Global Payments is an information technology company (in the Financial Sector).  They provide payment technology and software solutions for card, electronic, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific and they operate through three segments: Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions.

As shown in my GARP (Growth at a Reasonable Price) stock screener results below, Global Payments meets all nineteen filters. 

Global Payments Inc. (GPN) -- New Covered Calls Position 

The buy/write transaction was as follows:
8/28/2024 Bought 300 Global Payments Inc. shares at $109.22.

8/28/2024 Sold 3 GPN Sept 20th, 2024 $105.00 Call options @ $5.58 per share.
9/13/2024 Upcoming ex-dividend of $.25 per share.

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $31,094.01
= ($109.22 - $5.58) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$1,671.99
= ($5.58 * 300 shares) - $2.01 commission
(b) Dividend Income (If GPN stock price is assigned early on the day before the 9/13/2024 ex-dividend date): +$0.00; OR
(b) Dividend Income (If Global Payments stock is above the $105.00 strike price at the September 20th, 2024 options expiration date): +$75.00

= $.25 dividend x 300 shares

(c) Capital Appreciation (If GPN stock price is assigned early on the day before the 9/13/2024 ex-dividend date): -$1,266.00

= ($105.00 strike price - $109.22 stock purchase price) * 300 shares; OR 

(c) Capital Appreciation (If Global Payments stock is above the $105.00 strike price at the September 20th, 2024 options expiration date): -$1,266.00
= ($105.00 strike price - $109.22 stock purchase price) * 300 shares

1. Total Net Profit (If GPN stock price is assigned early on the day before the 9/13/2024 ex-dividend date): +$405.99

= (+$1,671.99 options income +$0.00 dividend income -$1,266.00 capital appreciation); OR
2. Total Net Profit [If Global Payments stock price is in-of-the-money (i.e. above $105.00 strike price) at options expiration]: +$480.99
= (+$1,671.99 options income +$75.00 dividend income -$1,266.00 capital appreciation)

1. Absolute Return-on-Investment: (If early assignment): +1.3%

= +$405.99/$31,094.01
Annualized Return-on-Investment: +29.8%
= (+$405.99/$31,094.01) * (365/16 days); OR 

2. Absolute Return-on-Investment: (If stock is above $105.00 strike price at the options expiration date) : +1.5%
= +$480.99/$31,094.01
Annualized Return-on-Investment: +24.5%
= (+$480.99/$31,094.01) * (365/23 days)