September 13th, 2024 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions with September 13th, 2024 weekly options expiration dates.  The position in Nvidia Corporation (NVDA) closed in-the-money so their Calls expired and the shares were called away (i.e. sold) at the $105.00 strike price.  The position in Schlumberger closed out-of-the-money so the Calls expired and the shares remain in the Covered Calls Advisor Portfolio.  A summary of the results for each of these positions is as follows:

Nvidia Corporation (NVDA) -- +2.1% absolute return (equivalent to +84.5% annualized return-on-investment) for the 9 days of this investment.  This Covered Call position was assigned at the $105.00 strike price on its 9/13/2024 options expiration date since the stock closed in-the-money at $118.76 per share.  The most recent post detailing this Covered Calls position is here. 

Schlumberger Ltd. (SLB) -- This Covered Calls position closed yesterday at $40.32 which was below its $43.00 strike price, so the eight 9/13/2024 SLB Call options expired and 800 shares now remain in the Covered Calls Advisor Portfolio.  The most recent post detailing this position is here.  Early this week I will decide to either continue this Covered Calls position by selling 8 Call options against the 800 SLB shares currently held or close out the position by selling the 800 SLB shares.  

I welcome your feedback at my email address shown below with your questions or topics related to this blog post specifically or anything related to the Covered Calls investing strategy.

Best Wishes,

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Established Covered Calls in Nvidia Corporation

This morning a short-term Covered Calls position was established in Nvidia Corporation (ticker NVDA). Two hundred shares were purchased at $107.08 and two September 13th, 2024 weekly Call options were sold at the $105.00 strike price at $4.22 per share--a buy/write net debit transaction of $102.86 per share which provides a $2.14 per share time value profit potential.  As I prefer, the next quarterly earnings report on November 26th is after the September 13th options expiration date. 

As detailed below, a potential return-on-investment result is +2.1% absolute return-on-investment (equivalent to +84.5% annualized return-on-investment for the next 9 days) if the Nvidia share price is in-the-money (i.e. above the $105.00 strike price) and therefore assigned on its September 13th, 2024 options expiration date.

 
Nvidia Corporation (NVDA) -- New Covered Calls Position

The buy/write transaction was as follows:
9/4/2024 Bought 200 Nvidia Corporation shares at $107.08.

9/4/2024 Sold 2 NVDA Sept 13th, 2024 $105.00 Call options @ $4.22 per share.
9/12/2024 Upcoming ex-dividend of $.01 per share.

A possible overall performance result (including commissions) for this Nvidia Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $20,573.34
= ($107.08 - $4.22) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$842.66
= ($4.22 * 200 shares) - $1.34 commission
(b) Dividend Income: +$2.00  = $.01 X 200 shares
(c) Capital Appreciation (If 200 Nvidia shares assigned at the $105.00 strike price at expiration): -$416.00
+($105.00 - $107.08) * 200 shares

Total Net Profit Potential (If 200 Nvidia shares assigned at $105.00 strike price at expiration): +$428.66
= (+$842.66 options income + $2.00 dividend income - $416.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.1%
= +$428.66/$20,573.34
Potential Annualized Return-on-Investment: +84.5%
= (+$428.66/$20,573.34) * (365/9 days)