Established Covered Call Positions in Oracle Corporation and U.S. Bancorp

Today Covered Calls were established in Oracle Corporation (ticker symbol ORCL) and U.S. Bancorp (ticker USB) when the Covered Calls Advisor's buy/write limit orders were executed.  For Oracle, 200 shares were purchased at $165.29 and 2 October 18th, 2024 Call options were sold at $7.00 at the $160.00 strike price.   For U.S. Bancorp, 500 shares were purchased at $45.35 and 5 October 18th, 2024 Call options were sold at $2.21 at the $43.50 strike price.  There is a quarterly earnings report on Oct. 16th (i.e. prior to the options expiration date), so I will watch this U.S. Bancorp position closely prior to the earnings for a possible early close out since I prefer not to hold existing positions through earnings since earnings often cause volatile stock price movements then.   

Given the Covered Calls Advisor's current "Neutral" Overall Market Meter outlook, moderately in-the-money Covered Calls positions were established.  The probability that the stock will be in-the-money on the options expiration dates was 74.0% for the Oracle position and 76.7% for the U.S. Bancorp position.  Both positions have an intervening ex-dividend date, so the potential results detailed below includes the possibility of early exercise since the ex-dividends are prior to their respective options expiration dates.

1.  Oracle Corporation (ORCL) -- New Covered Calls Position

The buy/write transaction was:
9/24/2024 Bought 200 Oracle Corporation shares @ $165.29
9/24/2024 Sold 2 ORCL 10/18/2024 $160.00 Call options @ $7.00 per share.  The Implied Volatility of these Calls was 19.7 when this position was established.
10/10/2024 Upcoming quarterly ex-dividend of $.40 per share.

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $31,659.34
= ($165.29 - $7.00) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,398.66
= ($7.00 * 200 shares) - $1.34 commission
(b) Dividend Income (If Oracle shares assigned on the business day prior to the October 10th ex-dividend date): = +$0.00; or
(b) Dividend Income (If Oracle shares assigned at the 10/18/2024 options expiration date): +$80.00
= $.40 per share x 200 shares
(c) Capital Appreciation (If Oracle shares assigned early): -$1,058.00
= ($160.00 strike price -$165.29 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If ORCL shares assigned with stock above the $160.00 strike price at the October 18th, 2024 options expiration date): -$1,058.00
= ($160.00 -$165.29) * 200 shares

1. Potential Net Profit (If Oracle shares assigned on 10/9/2024, the day prior to the Oct. 10th ex-dividend date): +$340.66
= (+$1,398.66 options income +$0.00 dividend income - $1,058.00 capital appreciation)
2. Potential Net Profit (If Oracle price is above $160.00 strike price at the Oct. 18th options expiration): +$420.66
= (+$1,398.66 options income +$80.00 dividend income - $1,058.00 capital appreciation)

1. Absolute Return-on-Investment (If Oracle shares assigned early on 10/9/2024, the day prior to the ex-dividend date): +1.1%
= +$340.66/$31,659.34
Equivalent Annualized Return-on-Investment (If assigned early on day prior to ex-div date): +24.5%
= (+$340.66/$31,659.34) * (365/16 days)

2. Absolute Return-on-Investment (If Oracle price is above the $160.00 strike price at the Oct. 18th options expiration date): +1.3%
= +$420.66/$31,659.34
Equivalent Annualized Return-on-Investment (If assigned on the 10/18/2024 options expiration date): +20.2%
= (+$420.66/$31,659.34) * (365/24 days)

2.  U.S. Bancorp (USB) -- New Covered Calls Position
The buy/write transaction was:
9/24/2024 Bought 500 U.S. Bancorp shares @ $45.35.
9/24/2024 Sold 5 USB 10/18/2024 $43.50 Call options @ $2.21 per share.
Note: Implied Volatility (IV) of the Call options was at 21.9 when this position was transacted which, as I prefer, is above the current VIX of 15.7.   
9/30/2024 Upcoming quarterly ex-dividend of $.50 per share. 

Two possible overall performance results (including commissions) for this U.S. Bancorp Covered Calls position are as follows:
Covered Calls Net Investment: $21,573.35
= ($45.35 - $2.21) * 500 shares + $3.35 commission

Net Profit Components:
(a) Options Income: +$1,101.65
= ($2.21 * 500 shares) - $3.35 commission
(b) Dividend Income (If U.S. Bancorp Call options exercised early this Friday which is the last business day prior to next Monday's Sept. 30th ex-div date): +$0.00; or
(b) Dividend Income (If U.S. Bancorp stock assigned at the October 18th, 2024 options expiration): +$250.00
= ($.50 dividends per share x 500 shares)

(c) Capital Appreciation (If U.S. Bancorp's Call options assigned early on Sept 27th): -$925.00

+($43.50 strike price - $45.35 stock purchase price) * 500 shares; or
(c) Capital Appreciation (If shares assigned at $43.50 strike price at the 10/18/2024 options expiration): -$925.00
+($43.50 - $45.35) * 500 shares

1. Total Net Profit [If option exercised early (business day prior to the Sept. 30th ex-dividend date)]: +$176.65

= (+$1,101.65 options income +$0.00 dividend income -$925.00 capital appreciation); or

2. Total Net Profit (If 500 U.S. Bancorp shares assigned at the $43.50 strike price at the October 18th, 2024 expiration): +$426.65

= (+$1,101.65 options income +$250.00 dividend income -$925.00 capital appreciation)

1. Potential Absolute Return-on-Investment [If option exercised on business day prior to the 9/30/2024 ex-dividend date]: +0.9%

= +$176.65/$21,573.35

Potential Annualized Return-on-Investment (If option exercised early): +52.6%

= (+$176.65/$21,573.35) * (365/6 days); or

2. Potential Absolute Return-on-Investment (If U.S. Bancorp's shares assigned on the Oct. 18th options expiration date): +2.0%

= +$426.65/$21,573.35

Potential Annualized Return-on-Investment (If 500 U.S. Bancorp shares assigned at $43.50 at the October 18th, 2024 expiration): +30.1%

= (+$426.65/$21,573.35) * (365/24 days)