May 9th, 2025 Option Expiration Results

The Covered Calls Advisor Portfolio had one Covered Calls position in D.R. Horton Inc. (DHI) at the May 9th, 2025 weekly options expiration date and at the $120.00 strike price.  The position closed in-the-money yesterday at $122.03 per share, so the Call options expired and the 200 DHI shares were sold at their $120.00 strike price.  So, despite a decline in the stock price from its original purchase price of $125.39 to $122.03 yesterday, this position was profitable because (a) an in-the-money Covered Calls strike price was selected; and (2) my dividend capture strategy (see here) was used.  A summary of the results is:

DHI -- +1.3% absolute return-on-investment (equivalent to +43.6% annualized return-on-investment) for the 11 days of this Covered Calls investment.  The original blog post when this position was established is here. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Early Assignment of Las Vegas Sands Corp.

This morning I received an email notification from my broker (Schwab) that the 5 Las Vegas Sands Corp. (ticker symbol LVS) May 16th, 2025 Call options were exercised early, so the 500 shares of Las Vegas Sands stock in the Covered Calls Advisor Portfolio were assigned (i.e. sold) at the $34.00 strike price. 

Las Vegas Sands stock was $38.31 at yesterday's market close.  Early exercise by the owners of these Call options was expected since yesterday was the last business day before LVS's ex-dividend date and there was $.00 time value remaining in these Call options.  So the Call owner exercised their option to buy the shares in order to capture today's $.25 per share ex-dividend.  The per share stock price had increased from $35.98 when this Las Vegas Sands Corp. position was originally established on April 28th to $38.31 (which was 12.7% in-the-money) at yesterday's market close.  I remain very cautious on the stock market during the upcoming weeks, so I plan to keep the majority of my investments in a money market fund (including the cash received from closing out this LVS position).

As detailed below, the actual return-on-investment result achieved for this Las Vegas Sands position was +1.7% absolute return (equivalent to +78.3% annualized return-on-investment) for the 8 days this position was held. 

Las Vegas Sands Corporation (LVS) -- Covered Calls Position Closed by Early Assignment
The buy/write transaction was:
4/28/2025 Bought 500 Las Vegas Sands shares @ $35.98
4/28/2025 Sold 5 LVS 5/16/2025 $34.00 Call options @ $2.56 per share.
Note: Implied Volatility (IV) of the Call options was 43.6 when this position was transacted which, as preferred, is above the current VIX of 25.8.   
5/6/2025 Covered Calls position closed out by early assignment, so 5 LVS Calls expired and my 500 shares of LVS stock sold at the $34.00 strike price.

The overall performance result (including commissions) for this Las Vegas Sands Corp. Covered Calls position is as follows:
Covered Calls Net Investment: $16,713.35
= ($35.98 - $2.56) * 500 shares + $3.35 commission

Net Profit Components:
(a) Options Income: +$1,276.65
= ($2.56 * 500 shares) - $3.35 commission
(b) Dividend Income (LVS Call options exercised early on May 5th, 2025, the last business day prior to the May 6th ex-div date): +$0.00

(c) Capital Appreciation: -$990.00

+($34.00 strike price - $35.98 stock purchase price) * 500 shares

Total Net Profit: +$286.65

= (+$1,276.65 options income + $0.00 dividend income - $990.00 capital appreciation)

Absolute Return-on-Investment: +1.7%

= +$286.65/$16,713.35

Annualized Return-on-Investment: +78.3%

= (+$286.65/$16,713.35) * (365/8 days)

Established Covered Calls Position in Wells Fargo & Company

A short-term Covered Calls position was established in Wells Fargo & Company (ticker symbol WFC) today when the Covered Calls Advisor's buy/write limit order was executed -- 300 shares were purchased at $74.20 and 3 May 16th, 2025 monthly Call options were sold at $2.80 at the $72.00 strike price.  The corresponding extrinsic value (i.e. time value) was $.60 per share [$2.80 Call options premium - ($74.20 stock purchase price - $72.00 strike price)], all of which will be profit if the stock is assigned (either by early assignment on the day prior to the May 9th ex-dividend date or at the May 16th options expiration date). The Implied Volatility of the Call options was 27.7 which, as desired by the Covered Calls Advisor, is above the current 23.2 of the S&P 500 Volatility Index (i.e. VIX).  Also as preferred, the next earnings report on July 15th, 2025 is well after the options expiration date.

At today's purchase price, the upcoming ex-dividend of $.40 has a 2.2% annualized dividend yield.  So, this short-term (only 11 days until options expiration) position is established to take advantage of the potential to achieve a satisfactory annualized return-on-investment in a position that meets all nine criteria of the Covered Calls Advisor's Dividend Capture Strategy (see table at end of this post).  

Most companies in the Financial Sector (such as Wells Fargo) provide only modest growth prospects, but they often provide good annual dividend yields.  Consequently, the Covered Calls Advisor targets opportunities to use the Dividend Capture Strategy in all Financial Sector Covered Calls positions.  This new Wells Fargo Covered Calls position continues the Covered Calls Advisor's Dividend Capture Strategy of often selling in-the-money monthly Covered Calls for one of six mega-cap U.S. banks (Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Wells Fargo) for each options expiration month: (JPMorgan Chase quarterly for Jan, Apr, July, and Oct options expirations; Citigroup, Morgan Stanley, and/or Wells Fargo for Feb, May, Aug, and Nov options expirations; and Bank of America and/or Goldman Sachs for Mar, Jun, Sep, and Dec options expirations).

The goal of these monthly Covered Calls in these banks is to both provide an opportunity to either: (1) potentially capture the quarterly dividend payment and if the stock price remains above the strike price at options expiration, in which case the maximum possible return-on-investment result on the options expiration date for the position would be achieved; or (2) have the stock assigned early on the day prior to the ex-dividend date in which case the Covered Calls Advisor is usually very pleased since the Dividend Capture Strategy criteria are designed such that the annualized return-on-investment for early assignment normally exceeds the Covered Calls Advisor's minimum threshold (as is the case with this Wells Fargo position).  So far, applying this approach has provided attractive annualized return results -- better than would be achieved if Covered Calls positions for these bank stocks were held in the Covered Calls Advisor Portfolio during the other two non-dividend paying months each quarter.  

Two potential return-on-investment results for this position are highlighted below (including the possibility of early assignment since the ex-dividend is prior to the May 16th options expiration date).  Given the Covered Calls Advisor's current Neutral overall market sentiment, a slightly in-the-money Covered Calls position was established with a probability of 73.0% that the stock will be in-the-money, and therefore assigned (i.e. sold), on the May 16th, 2024 options expiration date.  

As detailed below, two potential return-on-investment results are: 

•  +0.8% absolute return (equivalent to +75.8% annualized return for the next 4 days) in the relatively unlikely event that the stock is assigned early (business day prior to this Friday's 5/9/2025 ex-dividend date); OR 

• +1.4% absolute return (equivalent to +46.2% annualized return over the next 11 days) if the stock is assigned on the May 16th options expiration date.

Wells Fargo & Company (WFC) -- New Covered Calls Position
The buy/write transaction was:

5/5/2025 Bought 300 Wells Fargo shares @ $74.20
5/5/2025 Sold 3 Wells Fargo 5/16/2025 $72.00 Call options @ $2.80
5/9/2025 Upcoming quarterly ex-dividend of $.40 per share

Two possible overall performance results (including commissions) for this Wells Fargo Covered Calls position are as follows:
Covered Calls Net Investment: $21,422.01
= ($74.20 - $2.80) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$837.99
= ($2.80 * 300 shares) - $2.01 commission
(b) Dividend Income (If option exercised early on May 4th, the day prior to the May 5th ex-div date): +$0.00; or
(b) Dividend Income (If Wells Fargo stock assigned at the May 16th, 2025 options expiration; so the $.40 dividend is captured): +$120.00
= ($.40 dividend per share x 300 shares)

(c) Capital Appreciation (If Wells Fargo Call options assigned early on May 5th, 2025): -$660.00
+($72.00 strike price - $74.20 stock purchase price) * 300 shares; or
(c) Capital Appreciation (If shares assigned at $72.00 strike price at options expiration): -$660.00
+($72.00 - $74.20) * 300 shares

1. Total Net Profit [If option exercised on 5/4/2025 (business day prior to the 5/5/2025 ex-dividend date)]: +$177.99

= (+$837.99 options income +$0.00 dividend income - $660.00 capital appreciation); or

2. Total Net Profit (If Wells Fargo shares assigned at $72.00 at the 5/16/2025 expiration): +$297.99

= (+$837.99 options income + $120.00 dividend income - $660.00 capital appreciation)

1. Absolute Return-on-Investment [If option exercised early on 5/5/2025]: +0.8%

= +$177.99/$21,422.01

Annualized Return-on-Investment (If option exercised early): +75.8%

= (+$297.99/$21,422.01) * (365/4 days); or

2. Absolute Return-on-Investment (If Wells Fargo shares assigned at $72.00 at the 5/16/2025 options expiration): +1.4%

= +$297.99/$21,422.01

Annualized Return-on-Investment (If Wells Fargo shares assigned at $72.00 at the 5/16/2025 options expiration date): +46.2%

= (+$297.99/$21,422.01) * (365/11 days)

Either outcome provides a satisfactory return-on-investment result for this Wells Fargo investment.  These returns will be achieved as long as the stock is above the $72.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $71.00 ($74.20 - $2.80 - $.40) provides a 4.3% downside protection below today's stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet must be 'YES' prior to establishing a position.  As shown below with this Wells Fargo position, all nine criteria are met.

May 2nd, 2025 Weekly Options Expiration Results

One of the nice features of the Covered Calls investing strategy is that we can easily calculate the potential return-on-investment (roi) results if the stock price were to close on the options expiration date at any possible price.  For example, I always make this calculation for the circumstance if the stock were to be in-the-money (i.e. above the Call option's strike price) on its options expiration date.  For any option chain that I am considering, this calculation provides me with the maximum potential return-on-investment result for any Covered Calls position I am contemplating establishing, and it does this in advance (i.e. before) I enter the trade. Using Schwab's Think or Swim platform I also look at the real-time probability that any particular Call option chain I'm evaluating will be assigned (i.e. close in-the-money) on its options expiration date.  Knowing both the risk (probability %) and reward (return-on-investment) for any specific Covered Calls position prior to making a Covered Calls investment is invaluable for making decisions that are consistent with my personal risk tolerance profile.

Furthermore, since Covered Calls and 100% Cash-Secured Puts are synthetically equivalent strategies, just prior to entering the trade order, we should also evaluate whether a Covered Calls or a Cash-Secured Puts order would be preferable.  This is easily done by comparing the time value (i.e. extrinsic value) of the comparable Calls or Puts position to determine which one has a higher value and therefore a higher potential return-on-investment.  In recent history, Calls have normally had the higher time value which is why I almost always choose to enter Covered Calls orders (even when the circumstance occurs that the time value between comparable Calls and Puts are basically equal).      

The Covered Calls Advisor Portfolio had two Covered Calls positions with May 2nd, 2025 weekly options expirations.  Both positions closed on this options expiration date yesterday with their stock prices in-the-money (i.e. above the strike price), so the Calls expired with no remaining value and the Covered Calls were closed out with the stocks sold at their respective strike prices; and their maximum potential return-on-investment results were achieved.  A summary of the return-on-investment results for each position is as follows:

1. Amazon.com Inc. (AMZN) -- +3.6% absolute return-on-investment (equivalent to +73.8% annualized return-on-investment) for the 18 days of this investment.  This Amazon.com position had a $175.00 strike price and it closed at $189.98 yesterday.  The blog post showing the details of this position on the day the position was originally established is here. 

2. Meta Platforms Inc. (META) -- +3.6% absolute return-on-investment (equivalent to +118.4% annualized return-on-investment) for the 11 days of this investment.  This Meta position had a $460.00 strike price and it closed yesterday at $597.02.  The blog post showing the details of this position on the day the position was originally established is here.

To read some of my prior posts related to my decision-making processes for Covered Calls investing, click on the "Covered Calls Processes" link shown in the "Categories" section in the right sidebar of the homepage (which is here).  One posted article there that several readers have found especially helpful and that you might begin with titled "Exploiting Our Covered Calls Investing "Edges"' is here.  

As always, I welcome your comments or questions at the email address shown below on any topics related to the Covered Calls investing strategy. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Early Assignment of Covered Calls Position in Citigroup Inc.

I was notified by Schwab via email early this morning that the three Citigroup Inc. (ticker C) May 16th, 2025 Call options were exercised yesterday.  Because Citi's stock price increased from $62.11 when this position was established to $70.59 at yesterday's market close, the original $1.22 time value in the Calls when the position was established had declined on yesterday's market close to $0.00.  So, with eleven days remaining until the May 16th options expiration date, the owner of these Calls exercised their option to buy the 300 shares at the $57.50 strike price in order to receive Monday's $.56 per share ex-dividend.  Although I will not receive the ex-dividend, I am pleased with the +41.4% annualized-return-on-investment (aroi) result achieved since it exceeds the maximum +38.3% aroi that might have been achieved if this position instead remained in-the-money and would therefore be assigned on its May 16th, 2025 options expiration date.   

The post when this Citigroup Inc. Covered Calls position was originally established is here.  As detailed below, the return-on-investment result for this Citigroup Covered Calls position was +2.2% absolute return in 19 days (equivalent to a +41.4% annualized return-on-investment).

Citigroup Inc. (C) -- Covered Calls Position Closed by Early Assignment

The simultaneous buy/write transaction was:
4/16/2025 Bought 300 Citigroup Inc. shares @ $62.11.
4/16/2025 Sold 3 Citi 5/16/2025 $57.50 Call options @ $5.83 per share.
Note: Three Citigroup Inc. Calls were exercised on the last business day prior to their May 5th, 2025 ex-dividend date, so the Calls expired and the 300 Citi shares were sold at the $57.50 strike price.

The overall performance result (including commissions) for this Citigroup Inc. Covered Calls position is as follows:
Covered Calls Cost Basis: $16,886.01
= ($62.11 - $5.83) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,746.99
= ($5.83 * 300 shares) - $2.01 commission
(b) Dividend Income (Citi Call options exercised early on May 2nd, the last business day prior to the May 5th, 2025 ex-div date): +$0.00

(c) Capital Appreciation: -$1,383.00
+($57.50 strike price - $62.11 stock purchase price) * 300 shares

Total Net Profit (Citi Call options exercised early): +$363.99

= (+$1,746.99 options income +$0.00 dividend income - $1,383.00 capital appreciation)

Absolute Return-on-Investment: +2.2%

= +$363.99/$16,886.01

Annualized Return-on-Investment: +41.4%

= (+$363.99/$16,886.01) * (365/19 days)

Continuation of Covered Calls Position in Nvidia Corporation

The Covered Calls Advisor Portfolio has a Covered Calls position in Nvidia Corporation (ticker NVDA) which expired last Friday with the stock at $111.01 which was below the $115.00 strike price.  Today this position was continued by rolling out to the May 16th, 2025 monthly options expiration at the same $115.00 strike price by selling-to-open three Calls at $4.10 per share when Nvidia's stock price was $113.99.  

As detailed below, a potential outcome for this Nvidia investment if the stock is in-the-money and therefore assigned on the options expiration date is +6.0% absolute return-on-investment over 53 days (equivalent to +41.3% annualized-return-on-investment) if the stock closes above the $115.00 strike price on the 5/16/2025 options expiration date.   This position demonstrates that by selling in-the-money strike prices, the Calls premium income received can overcome a significant 4.5% stock price decline from its original stock purchase price and still achieve a very positive return-on-investment outcome.  The details showing this potential return-on-investment result are as follows:

Nvidia Corporation (NVDA) -- Continuation of Covered Calls Position

The buy/write net limit order transaction was as follows:
3/24/2025 Bought 300 Nvidia Corporation shares at $120.39.

3/24/2025 Sold 3 NVDA 4/11/2025 $120.00 Call options @ $4.88 per share.  The Implied Volatility of the Calls was 49.9 when these Calls were sold.

4/11/2025 Three hundred Nvidia shares closed below the $120.00 strike price at $110.71, so the three Call options expired and the 300 Nvidia shares remain in the Covered Calls Advisor Portfolio.

4/14/2025 Continued this Nvidia Corporation Covered Calls position by selling 3 April 25th, 2025 $115.00 Calls at $3.35 per share when the stock was trading at $112.24 per share.  

4/25/2025 Three hundred Nvidia shares closed below the $115.00 strike price at $111.01, so the three Call options expired and the 300 Nvidia shares remain in the Covered Calls Advisor Portfolio.

5/1/2025 Continued this Nvidia Corporation Covered Calls position by selling 3 May 16th, 2025 $115.00 Calls at $4.10 per share when the stock was trading at $113.99 per share.  

A possible overall performance result (including commissions) for this Nvidia Corp. Covered Calls position if the stock is in-the-money (i.e. above the $115.00 strike price) on its 5/16/2025 options expiration date is as follows:
Covered Calls Net Investment: $34,655.01
= ($120.39 - $4.88) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$3,692.97
= ($4.88 + $3.35 + $4.10) * 300 shares - $6.03 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 300 Nvidia shares assigned at the $115.00 strike price on its 5/16/2025 options expiration date): -$1,617.00
+($115.00 strike price - $120.39 stock purchase price) * 300 shares

Total Net Profit Potential (If 300 Nvidia shares in-the-money and therefore assigned at the $115.00 strike price at the 5/16/2025 options expiration date): +$847.98
= (+$3,692.97 options income + $0.00 dividend income - $1,617.00 capital appreciation)

Potential Absolute Return-on-Investment: +6.0%
= +$2,075.97/$34,655.01
Potential Annualized Return-on-Investment: +41.3%
= (+$2,075.97/$34,655.01) * (365/53 days)

Short-Term Covered Calls Positions Established in D.R. Horton Inc. and Las Vegas Sands Corporation Using Dividend Capture Strategy

This morning Covered Calls were established in D.R. Horton Inc. (ticker DHI) and Las Vegas Sands Corporation (LVS).  Short-term positions were selected for each position -- May 9th for D.R. Horton and May 16th for Las Vegas Sands.  In each case before establishing these positions, I had established a net buy/write limit price slightly below the midpoint of the buy/write price that existed when I entered my limit order. In each case, my limit price was executed within an hour after I entered the orders. 

For D.R. Horton, 200 shares were purchased at $125.39 and 2 May 9th, 2025 Call options were sold at $6.55 at the $120.00 strike price.  For Las Vegas Sands, 500 shares were purchased at $35.98 and five May 16th, 2025 Call options were sold at $2.56 at the $34.00 strike price.  Given my 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 74.8% for the D.R. Horton position and 71.6% for the Las Vegas Sands position. 

Both positions have an intervening ex-dividend date prior to their expiration dates, so the potential results detailed below includes the possibility of early exercise since the ex-dividends are prior to their respective options expiration dates.  Also of importance, neither company has a quarterly earnings report prior to their respective options expiration dates.

Potential results for each position are detailed below.

1. D.R. Horton Inc. (DHI) -- New Covered Calls Position
The Buy/Write transaction was as follows:
4/28/2025 Bought 200 shares of D.R. Horton Co. stock @ $125.39 per share 
4/28/2025 Sold 2 D.R. Horton May 9th, 2025 $120.00 Call options @ $6.55 per share
5/2/2025 Upcoming ex-dividend of $.40 per share

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Position Net Investment: $23,769.34
= ($125.39 stock purchase price - $6.55 Call options premium) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,310.00
= ($6.55 * 200 shares)
(b) Dividend Income (If option exercised early on May 1st, the last business day prior to the May 2nd ex-div date): +$0.00; or
(b) Dividend Income (If DHI stock assigned at the May 9th, 2025 options expiration date): $80.00 = ($.40 dividend per share x 200 shares)
(c) Capital Appreciation (If D.R. Horton Call options assigned early): -$1,078.00
+($120.00 strike price - $125.39 stock price) * 200 shares; or
(c) Capital Appreciation (If shares assigned at $120.00 strike price at the May 9th options expiration): -$1,078.00
+($120.00 - $125.39) * 200 shares

1. Total Net Profit [If option exercised early on the last business day prior to the May 2nd ex-dividend date)]: +$232.00

= (+$1,310.00 options income +$0.00 dividend income -$1,078.00 capital appreciation); or

2. Total Net Profit (If stock shares assigned at $120.00 strike price at the May 9th, 2025 expiration): +$312.00

= (+$1,310.00 options income +$80.00 dividend income -$1,078.00 capital appreciation)

1. Potential Absolute Return-on-Investment (If option exercised early on May 1st): +1.0%

= +$232.00/$23,769.34

Annualized Return-on-Investment: +89.1%

= (+$232.00/$23,769.34) * (365/4 days); or

2. Potential Absolute Return-on-Investment (If D.R. Horton shares assigned at $120.00 at the May 9th, 2025 options expiration date): +1.3%

= +$312.00/$23,769.34

Annualized Return-on-Investment (If shares assigned at the 5/9/2025 expiration date): +43.6%

= (+$312.00/$23,769.34) * (365/11 days)

2. Las Vegas Sands Corporation (LVS) -- New Covered Calls Position
The buy/write transaction was:
4/28/2025 Bought 500 Las Vegas Sands shares @ $35.98
4/28/2025 Sold 5 LVS 5/16/2025 $34.00 Call options @ $2.56 per share.
Note: Implied Volatility (IV) of the Call options was 43.6 when this position was transacted which, as preferred, is above the current VIX of 25.8.   
5/6/2025 Upcoming quarterly ex-dividend of $.25 per share.

Two possible overall performance results (including commissions) for this Las Vegas Sands Corp. Covered Calls position are as follows:
Covered Calls Net Investment: $16,713.35
= ($35.98 - $2.56) * 500 shares + $3.35 commission

Net Profit Components:
(a) Options Income: +$1,276.65
= ($2.56 * 500 shares) - $3.35 commission
(b) Dividend Income (If LVS Call options exercised early on May 5th, 2025, the last business day prior to the May 6th ex-div date): +$0.00; or
(b) Dividend Income (If LVS stock assigned at the May 16th, 2025 options expiration): +$125.00
= ($.50 dividend per share x 500 shares)

(c) Capital Appreciation (If Las Vegas Sand's Call options assigned early on May 5th): -$990.00

+($34.00 strike price - $35.98 stock purchase price) * 500 shares; or
(c) Capital Appreciation (If shares assigned at $34.00 strike price at the 5/16/2025 options expiration): -$990.00
+($34.00 - $35.98) * 500 shares

1. Total Net Profit [If option exercised early (business day prior to the May 6th ex-dividend date)]: +$286.65

= (+$1,276.65 options income +$0.00 dividend income - $990.00 capital appreciation); or

2. Total Net Profit (If LVS's shares assigned at the $34.00 strike price at the May 16th, 2025 options expiration date): +$411.65

= (+$1,276.65 options income + $125.00 dividend income - $990.00 capital appreciation)

1. Potential Absolute Return-on-Investment [If option exercised on business day prior to ex-dividend date]: +1.7%

= +$286.65/$16,713.35

Annualized Return (If option exercised early): +78.3%

= (+$286.65/$16,713.35) * (365/8 days); or

2. Potential Absolute Return-on-Investment (If LVS's shares assigned on the May 16th options expiration date): +2.5%

= +$411.65/$16,713.35

Annualized Return (If Las Vegas Sand's shares assigned at $34.00 at the 5/16/2025 options expiration date): +49.9%

= (+$411.65/$16,713.35) * (365/18 days)

April 25th, 2025 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions with April 25th, 2025 options expiration dates.  One position in NetApp Inc. closed in-the-money so its two Call options expired and the shares were called away (i.e. sold) at the $84.00 strike price.  The position in Nvidia Corporation closed out-of-the-money (i.e. below the strike price) so the three Calls expired and the shares remain in the Covered Calls Advisor Portfolio.    

A summary of the results for both positions are as follows:

1. NetApp Inc. (NTAP) -- +2.7% absolute return (equivalent to +35.6% annualized return-on-investment) for the 28 days of this investment.  This Covered Call position was assigned at the $84.00 strike price on its April 25th options expiration date since it closed in-the-money yesterday at $88.45 per share.  The most recent post detailing this Covered Calls position is here. 

2. Nvidia Corporation (NVDA) -- This Covered Calls position closed yesterday at $111.01 per share which was below its $115.00 strike price, so the three 4/25/2025 Nvidia Call options expired and 300 shares now remain in the Covered Calls Advisor Portfolio.  The recent post detailing this position is here.  Early next week I will decide to either continue this Covered Calls position by selling 3 Call options against the 300 Nvidia Corp. shares currently held (most likely decision) or close out the position by selling the 300 Nvidia shares.

I welcome your feedback at my email address shown below with your questions on any topic related to the Covered Calls investing strategy.

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Established Covered Calls Position in Oneok Inc.

A buy/write limit order in Oneok Inc. (ticker OKE) was executed this afternoon at the Covered Calls Advisor's net debit price of $79.24 per share. Two hundred shares were purchased at $86.33 and two May 16th, 2025 Call options were sold for $7.09 per share at the $80.00 strike price, a time value of $.76 = [$7.09 options premium - ($86.33 stock price - $80.00 strike price)] per share.  This position is relatively deep-in-the-money since the probability that the position will be in-the-money on its May 16th options expiration date was 79.2% when this transaction was executed today.   

This position uses the Covered Calls Advisor's Dividend Capture Strategy (see here).  Oneok has an upcoming quarterly ex-dividend of $1.03 per share that goes ex-dividend on May 5th, 2025 which is prior to the May 16th, 2025 options expiration date. This is equivalent to an absolute annual dividend yield of 4.8% (at the current $86.33 stock price) and more importantly for this Covered Calls position, an equivalent annualized dividend yield of 20.7% = [($.1.03/$86.33) x (365/21 days-to-expiration)] for the 21 days duration of this position.  This dividend increases the potential annualized return-on-investment results (compared with a similar position without a dividend capture potential) and the dividend is included in the detailed potential return-on-investment calculations shown below.  Either an early assignment on the last business day prior to the ex-dividend date or on the May 16th, 2025 options expiration date would be a desirable result given the annualized return-on-investment potential upon assignment for either outcome. 

Normally I avoid positions with intervening quarterly earnings reports prior to the options expiration date.  However, Oneok's 1st quarter earnings will be reported after the market close next Tuesday.  Since 89% of their revenue is fee based, their income is more predictable than for most companies in the energy sector; so I am confident they will have a good report.  But to be cautious, I provided more downside protection with the $80.00 strike price than I normally would if there was no upcoming earnings report.  

Oneok Inc. is a diversified midstream energy services company specializing primarily in gathering, processing, storage, and transportation of natural gas and natural gas liquids.  Their 14,000 miles network of pipelines is the longest of any company in the U.S. and provides them access to nearly 50% of U.S. refining capacity.  It is headquartered in Tulsa and operates in the mid-continent region (including the Permian Basin in Texas, most Rocky Mountain states, and in the Williston Basin in North Dakota).  Their acquisitions of Magellan, EnLink, and Medallion in Q3 2024 will be additive not only to their top line, but also to their bottom-line results in 2025 and thereafter. 

As shown in my Q+V+G (Quality+Value+Growth) stock screener results below, Oneok meets all nineteen criteria.  Moreover, it is the only Energy Sector company that appeared in this Q+V+G screener today. 

As detailed below, two potential return-on-investment results are: 

•  +1.0% absolute return (equivalent to +34.7% annualized return-on-investment for the next 10 days) if the stock is assigned early (the last business day prior to the May 5th ex-dividend date); OR 

• +2.3% absolute return (equivalent to +39.1% annualized return over the next 21 days) if the stock is assigned on the May 16th, 2025 options expiration date.

Oneok Inc. (OKE) -- New Covered Calls Position
The simultaneous buy/write transaction was:
4/25/2025 Bought 200 Oneok Inc. shares @ $86.33.
4/25/2025 Sold 2 Oneok 5/16/2025 $80.00 Call options @ $7.09 per share.
Note: the Implied Volatility of the Call options was 36.8 when this position was established.
5/3/2025 Upcoming quarterly ex-dividend of $1.03 per share.

Two possible overall performance results (including commissions) for this Oneok Inc. Covered Calls position are as follows:
Covered Calls Cost Basis: $15,849.34
= ($86.33 - $7.09) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,416.66
= ($7.09 * 200 shares) - $1.34 commission
(b) Dividend Income (If options exercised early on May 2nd, the last business day prior to the May 5th, 2025 ex-div date): +$0.00; or
(b) Dividend Income (If Oneok stock assigned on the May 16th, 2025 options expiration -- so the dividend is captured): +$206.00
= ($1.03 dividend per share x 200 shares)

(c) Capital Appreciation (If Oneok Call options assigned early on May 2nd): -$1,266.00
+($80.00 - $86.33) * 200 shares; or
(c) Capital Appreciation (If shares assigned at $80.00 strike price at options expiration): -$1,266.00
+($80.00 - $86.33) * 200 shares

1. Total Net Profit (If options exercised early): +$150.66

= (+$1,416.66 options income +$0.00 dividend income -$1,266.00 capital appreciation); or

2. Total Net Profit (If Oneok shares assigned at $80.00 at the May 16th, 2025 expiration): +$356.66

= (+$1,416.66 options income + $206.00 dividend income - $1,266.00 capital appreciation)

1. Absolute Return-on-Investment [If option exercised on business day prior to the May 5th ex-dividend date]: +1.0%

= +$150.66/$15,849.34

Annualized Return-on-Investment (If option exercised early): +34.7%

= (+$150.66/$15,849.34) * (365/10 days); or

2. Absolute Return-on-Investment (If Oneok shares assigned on the May 16th, 2025 options expiration date): +2.3%

= +$356.66/$15,849.34

Annualized Return-on-Investment (If Oneok shares assigned at $80.00 at the May 16th, 2025 expiration): +39.1%

= (+$677.49/$30,956.01) * (365/21 days)

Either outcome provides a satisfactory return-on-investment result for this Oneok Inc. Covered Calls investment.  These returns will be achieved as long as the stock is above the $80.00 strike price at assignment.  However, if the stock declines below the strike price, a breakeven price of $78.21 = ($86.33 stock price - $7.09 Call options price - $1.03 dividend) provides 9.4% downside protection below today's stock purchase price.

Covered Call Position Established in Meta Platforms Inc.

Today a short-term Covered Call position was established in Meta Platforms Inc. (ticker META).  My buy/write net debit limit order was executed and 100 Meta shares were purchased at $483.50 and 1 May 2nd, 2025 $460.00 Call option was sold at $39.35 per share -- a net debit of $444.15 per share.  So, the potential time value profit if the stock is in-the-money and therefore closed out by assignment at expiration is $15.85 per share [$39.35 Call option premium - ($483.50 stock purchase price - $460.00 strike price)].  The probability of assignment on the options expiration date was 62.2% when this transaction occurred.  

The next quarterly earnings report after the market close on April 30th is just prior to the May 2nd options expiration date, so I will watch this position closely to consider whether to close it out prior to the 4/30/2025 earnings reporting date.  Because the Dow Jones Average was down by 1170 points early this afternoon when this position was established, the VIX had spiked above 35 and the Implied Volatility of the Meta Call option sold was very high at 77.8 when this position was established.  Consequently, the potential return-on-investment for this position is also very high even though a somewhat conservative in-the-money strike price was selected.  I admit it is psychologically difficult to establish a position in any company when its stock price, the negative sentiment surrounding it (including its current antitrust trial), and also for the overall stock market which are all experiencing difficult declines.  But I decided to establish this position since I like the short-term risk/reward potential of Meta at its current price.  The fact that Meta is the highest rated Communications Services company among my stock screeners also provided me sufficient confidence to establish this Covered Call position.  The current results from the metrics in my Quality+Value+Growth (Q+V+G) screener for Meta are as follows:

As detailed below, a potential outcome for this Meta investment is +3.6% absolute return-on-investment for the next 11 days (equivalent to +118.4% annualized-return-on-investment) if the stock closes above the $460.00 strike price on the May 2nd, 2025 options expiration date.

Meta Platforms Inc. (META) -- New Covered Call Position

The net debit buy/write limit order was executed as follows:
4/21/2025 Bought 100 shares of Meta Platforms Inc. stock @ $483.50 per share.  
4/21/2025 Sold 1 META May 2nd, 2025 $460.00 Call option @ $39.35 per share.  

A possible overall performance result (including commissions) if this position is assigned on its 5/2/2025 option expiration date is as follows:
Meta Covered Call Net Investment: $44,415.67
= ($483.50 - $39.35) * 100 shares + $.67 commission

Net Profit Components:
(a) Call Option Income: +$3,934.33
= ($39.35 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Meta stock is above the $460.00 strike price at the May 2nd option expiration date): -$2,350.00
= ($460.00 strike price - $483.50 stock purchase price) * 100 shares

Potential Total Net Profit (If assigned at expiration): +$1,584.33
= (+$3,934.33 option income + $0.00 dividend income - $2,350.00 capital appreciation)

Potential Absolute Return-on-Investment: +3.6%
= +$1,584.33/$44,415.67
Potential Equivalent Annualized-Return-on-Investment: +118.4%
= (+$1,584.33/$44,415.67) * (365/11 days)

April 17th, 2025 Monthly Options Expiration Results

The Covered Calls Advisor Portfolio had six Covered Calls positions with April 17th, 2025 monthly options expirations.  Fortunately, all six positions closed on their options expiration date yesterday with their stock prices in-the-money.  The Calls expired with no remaining value and the Covered Calls were closed out with the stocks sold at their respective strike prices, so the maximum potential return-on-investment profit was achieved for all six positions.  The most recent positions and their associated return-on-investment details are as follows:

1. Alphabet Inc. (GOOGL) -- +2.6% absolute return-on-investment (equivalent to +28.4% annualized return-on-investment) for the 34 days of this investment.  This GOOGL position had a $150.00 strike price and it closed at $151.22 yesterday.  The blog post showing the details of this position is here. 

2. Humana Inc. (HUM) -- +7.5% absolute return-on-investment (equivalent to +97.7% annualized return-on-investment) for the 28 days of this investment.  This Humana position had a $240.00 strike price and it closed at $264.48 yesterday.  The blog post showing the details of this position is here.

3. Merck & Co. Inc. (MRK) -- +1.0% absolute return-on-investment (equivalent to +46.7% annualized return-on-investment) for the 8 days of this investment.  This Merck position had a $75.00 strike price and it closed at $78.00 yesterday.  The blog post showing the details of this position is here. 

4. Pinterest Inc. (PINS) -- +2.3% absolute return-on-investment (equivalent to +93.0% annualized return-on-investment) for the 9 days of this investment.  This Pinterest position had a $22.00 strike price and it closed at $25.26 yesterday.  The original position details are here.

5. Robinhood Markets Inc. (HOOD) -- +2.1% absolute return-on-investment (equivalent to +108.6% annualized return-on-investment) for the 7 days of this investment.  This Robinhood position had a $33.00 strike price and it closed at $41.18 yesterday.  The blog post showing the details of this position is here. 

6. Vertiv Holdings Company (VRT) -- +2.7% absolute return-on-investment (equivalent to +70.2% annualized return-on-investment) for the 14 days of this investment.  This Vertiv position had a $60.00 strike price and it closed at $73.21 yesterday.  The original position details are here.

As always, I welcome your questions at the email address shown below on any topics related to the Covered Calls investing strategy. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Established Covered Calls Position in Citigroup Inc.

A buy/write limit order in Citigroup Inc. (ticker C) was executed at the Covered Calls Advisor's net debit price of $56.28 per share.  Three hundred shares were purchased at $62.11 and three May 16th, 2025 monthly Call options were sold for $5.83 at the $57.50 strike price, a time value of $1.22 per share = [$5.83 options premium - ($62.11 stock price - $57.50 strike price)] per share. 

This position uses the Covered Calls Advisor's Dividend Capture Strategy (see description here).  Citigroup has an upcoming quarterly ex-dividend of $.56 per share (an increase from the previous year's rate of $.53) that goes ex-dividend on May 5th, 2025 which is prior to the May 16th options expiration date. This is equivalent to an absolute annual dividend yield of 3.6% (at the current $62.11 stock price) and more importantly for this Covered Calls position, an equivalent annualized dividend yield of 11.0% = [($.56/$62.11) x (365/30)] for the 30 days duration of this position.  This dividend is included in the detailed potential return-on-investment calculations below.  Either an early assignment on the day prior to the ex-dividend date or on the May 16th, 2025 options expiration date would be desirable to the Covered Calls Advisor given the attractive potential annualized return-on-investment results upon assignment for either outcome.

Citigroup has beat analysts' quarterly earnings-per-share estimates in each of their past 3 years (12 quarters) and they project fiscal year 2025 eps to be +22.8% above the 2024 eps result.  In addition, Citi's price-to-tangible-book-value of .64 is less than half that of all its U.S.-based mega-bank peers.  The 21 analysts following Citi have an average target price of $86.12 (+38.7% above today's purchase price). 

As detailed on the table at the bottom of this post, all nine criteria of the Dividend Capture Strategy are met with this position.  The Covered Calls Advisor's current Overall Market Meter outlook remains Neutral and a moderately in-the-money strike price was used in this case.  The probability that this position will be in-the-money and therefore assigned on its 5/16/2025 expiration date was 71.3% when this position was established.     

As detailed below, two potential return-on-investment results are: 

•  +2.2% absolute return (equivalent to +41.4% annualized return-on-investment for the next 19 days) if the stock is assigned early (business day prior to the May 5th ex-dividend date); OR 

• +3.2% absolute return (equivalent to +38.3% annualized return-on-investment over the next 30 days) if the stock is assigned on the May 16th options expiration date.

Citigroup Inc. (C) -- New Covered Calls Position
The simultaneous buy/write transaction was:
4/16/2025 Bought 300 Citigroup Inc. shares @ $62.11.
4/16/2025 Sold 3 Citi 5/16/2025 $57.50 Call options @ $5.83 per share.
Note: The Implied Volatility of the Call options was 43.8 when this position was transacted.
5/05/2025 Upcoming quarterly ex-dividend of $.56 per share.

Two possible overall performance results (including commissions) for this Citigroup Inc. Covered Calls position are as follows:
Covered Calls Cost Basis: $16,886.01
= ($62.11 - $5.83) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,746.99
= ($5.83 * 300 shares) - $2.01 commission
(b) Dividend Income (If options exercised early on May 2nd, the last business day prior to the May 5th, 2025 ex-div date): +$0.00; or
(b) Dividend Income (If Citigroup stock assigned on the May 16th, 2025 options expiration date): +$168.00
= ($.56 dividend per share x 300 shares)

(c) Capital Appreciation (If Citi Call options assigned early on May 5th): -$1,383.00
+($57.50 strike price - $62.11 stock purchase price) * 300 shares; or
(c) Capital Appreciation (If shares assigned at $57.50 strike price at options expiration): -$1,383.00
+($57.50 - $62.11) * 300 shares

1. Total Net Profit (If options exercised early): +$363.99

= (+$1,746.99 options income +$0.00 dividend income - $1,383.00 capital appreciation); or

2. Total Net Profit (If Citi shares assigned at $57.50 at the May 16th, 2025 expiration): +$531.99

= (+$1,746.99 options income + $168.00 dividend income - $1,383.00 capital appreciation)

1. Absolute Return-on-Investment [If option exercised on business day prior to the May 5th ex-dividend date]: +2.2%

= +$363.99/$16,886.01

Annualized Return-on-Investment (If option exercised early): +41.4%

= (+$363.99/$16,886.01) * (365/19 days); or

2. Absolute Return-on-Investment (If Citi shares assigned on the May 16th, 2025 options expiration date): +3.2%

= +$531.99/$16,886.01

Annualized Return-on-Investment (If Citi shares assigned at $57.50 at the May 16th, 2025 expiration): +38.3%

= (+$531.99/$16,886.01) * (365/30 days)

Either outcome provides a satisfactory return-on-investment result for this Citigroup Covered Calls investment.  These returns will be achieved as long as the stock is above the $57.50 strike price at assignment.  However, if the stock declines below the strike price, the breakeven price of $55.72 = ($62.11 stock price - $5.83 Call options price - $.56 dividend) provides 10.3% downside protection below today's stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet (see below) must be 'YES' prior to establishing a new Covered Calls position using the Covered Calls Advisor's Dividend Capture strategy.  As shown in the chart below, all nine criteria are achieved for this Citigroup Covered Calls position.

Covered Calls Position Established in Amazon.com Inc.

This afternoon my buy/write net debit limit order was executed at a price of $168.85 when 200 shares of Amazon.com Inc. (ticker symbol AMZN) stock were purchased at $181.97 and 2 May 2nd, 2025 $175.00 Call options were sold at $13.12 per share.  So the potential time value profit if the stock is in-the-money and therefore closed out by assignment on the options expiration date is $6.15 per share [$13.12 Call options premium - ($181.97 stock purchase price - $175.00 strike price)].  The probability that the Calls will be above the $175.00 strike price on the May 2nd options expiration date when this Covered Calls position was established was 60.2%.

It has been a while since I had a Covered Calls position in Amazon.com and I was pleased to see that it appeared today in my GARP (Growth at a Reasonable Price) stock screener.  This stock screen includes both growth and value filters.  As shown below Amazon.com passed every filter criterion in the screener.  Please consider taking some time to review the filters I have established for this screener and how Amazon compares against each one:

Amazon.com Inc. (AMZN) -- New Covered Calls Position

The net debit buy/write limit order was executed as follows:
4/14/2025 Bought 200 shares of Amazon.com stock @ $181.97 per share.  
4/14/2025 Sold 2 AMZN May 2nd, 2025 $175.00 Call options @ $13.12 per share.
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Calls was 57.2 when this position was established which, as preferred, is well above the current VIX of 30.2.  

A possible overall performance result (including commissions) if this position is assigned on its 5/2/2025 options expiration date is as follows:
Covered Calls Net Investment: $33,771.34
= ($181.97 - $13.12) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$2,622.66
= ($13.12 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Amazon.com stock is above the $175.00 strike price at the May 2nd, 2025 options expiration date): -$1,394.00
= ($175.00 strike price - $181.97 stock purchase price) * 200 shares

Total Net Profit Potential (If assigned at the $175.00 strike price on the 5/2/2025 options expiration date): +$1,228.66
= (+$2,622.66 options income + $0.00 dividend income - $1,394.00 capital appreciation)

Potential Absolute Return-on-Investment: +3.6%
= +$1,228.66/$33,771.34
Potential Equivalent Annualized-Return-on-Investment: +73.8%
= (+$1,228.66/$33,771.34) * (365/18 days)

Given the current volatility in the stock market primarily caused by the ongoing tariffs uncertainty, I am now approximately 50% invested in Covered Calls and 50% remains in a Schwab Money Market Fund with a current annual yield of 4.18%.  

Continuation of Covered Calls Positions in NetApp Inc. and Nvidia Corporation

Last Friday, my Covered Calls positions in NetApp Inc. (ticker NTAP) and Nvidia Corporation (ticker NVDA) closed out-of-the-money, so the Call options expired and the shares remained in the Covered Calls Advisor Portfolio.  This morning, I decided to continue both of these Covered Calls positions by selling Call options by rolling-down-and-out two weeks to the April 25th, 2025 options expiration dates.  The NetApp strike price went from the original $86.00 strike price to the $84.00 strike and the Nvidia strike price went from the original $120.00 strike price to the $115.00 strike.  Despite the stock price declines for both companies since these positions were established, because conservative in-the-money Covered Calls were initially established, as detailed below they could both result in profitable return-on-investments if assigned on their 4/25/2025 options expiration date.  The transactions-to-date for these positions as well as the potential return-on-investment results if these positions are in-the-money and therefore assigned on their 4/25/2025 options expiration date are as follows:

1. NetApp Inc. (NTAP) -- Continuation of Covered Calls Position
The simultaneous buy/write transaction was:
3/28/2025 Bought 200 NetApp Inc. shares @ $88.78.
3/28/2025 Sold 2 NetApp 4/11/2025 $86.00 Call options @ $3.70 per share.
Note: the Implied Volatility of the Call options was 29.5 when this position was established.
4/4/2025 Quarterly ex-dividend of $.52 per share.
4/11/2025 Two hundred NetApp shares closed below the $86.00 strike price at $82.65, so the 2 Call options expired and the 200 NTAP shares remain in the Covered Calls Advisor Portfolio.

4/14/2025 Continued this NetApp Covered Calls position by selling 2 April 25th, 2025 $84.00 Calls at $2.90 per share when the stock was trading at $83.84 per share.  

A possible overall performance result (including commissions) for this NetApp Inc. Covered Calls position if the stock is in-the-money (i.e. above the $84.00 strike price) on its 4/25/2025 options expiration date is as follows:
Covered Calls Cost Basis: $17,017.34
= ($88.78 - $3.70) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,317.32
= ($3.70 + $2.90) * 200 shares - $2.68 commissions
(b) Dividend Income: +$104.00
= ($.52 dividend per share x 200 shares)

(c) Capital Appreciation (If shares assigned at the $84.00 strike price on its 4/25/2025 options expiration date): -$956.00
+($84.00 strike price - $88.78 stock purchase price) * 200 shares

Total Net Profit Potential (If NTAP shares assigned at $84.00 at the April 25th, 2025 expiration): +$465.32

= (+$1,317.32 options income + $104.00 dividend income - $956.00 capital appreciation)

Potential Absolute Return-on-Investment (If NetApp shares assigned on the April 25th, 2025 options expiration date): +2.7%

= +$465.32/$17,017.34

Potential Annualized Return-on-Investment (If NetApp shares assigned at $84.00 at the April 25th, 2025 options expiration date): +35.6%

= (+$465.32/$17,017.34) * (365/28 days)

  

2. Nvidia Corporation (NVDA) -- Continuation of Covered Calls Position

The buy/write net limit order transaction was as follows:
3/24/2025 Bought 300 Nvidia Corporation shares at $120.39.

3/24/2025 Sold 3 NVDA 4/11/2025 $120.00 Call options @ $4.88 per share.  The Implied Volatility of the Calls was 49.9 when these Calls were sold.

4/11/2025 Three hundred Nvidia shares closed below the $120.00 strike price at $110.71, so the three Call options expired and the 300 Nvidia shares remain in the Covered Calls Advisor Portfolio.

4/14/2025 Continued this Nvidia Corporation Covered Calls position by selling 3 April 25th, 2025 $115.00 Calls at $3.35 per share when the stock was trading at $112.24 per share.  

A possible overall performance result (including commissions) for this Nvidia Corp. Covered Calls position if the stock is in-the-money (i.e. above the $115.00 strike price) on its 4/25/2025 options expiration date is as follows:
Covered Calls Net Investment: $34,655.01
= ($120.39 - $4.88) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$2,464.98
= ($4.88 + $3.35) * 300 shares - $4.02 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 300 Nvidia shares assigned at the $115.00 strike price on its 4/25/2025 options expiration date): -$1,617.00
+($115.00 strike price - $120.39 stock purchase price) * 300 shares

Total Net Profit Potential (If 300 Nvidia shares in-the-money and therefore assigned at the $115.00 strike price at the 4/25/2025 options expiration date): +$847.98
= (+$2,464.98 options income + $0.00 dividend income - $1,617.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.4%
= +$847.98/$34,655.01
Potential Annualized Return-on-Investment: +27.9%
= (+$847.98/$34,655.01) * (365/32 days)

Covered Call Position Closed in Taiwan Semiconductor ADR

Last Friday, the Covered Call position in Taiwan Semiconductor ADR (ticker TSM) closed out-of-the-money at $158.17 which was below its $162.50 strike price.  Since I prefer to avoid holding stock when a company is reporting earnings (and Taiwan Semi has a quarterly earnings report this Thursday), I decided to close out this position by selling the 100 shares at a net loss of $262.67. The transactions history for this Taiwan Semi Covered Call position and its associated return-on-investment results are detailed below.

Taiwan Semiconductor ADR (TSM) -- Covered Call Position Closed Out
The simultaneous buy/write transactions was as follows:
3/27/2025 Bought 100 shares of Taiwan Semiconductor stock @ $169.83 per share 
3/27/2025 Sold 1 Taiwan Semi April 11th, 2025 $162.50 Call option @ $10.26 per share
4/11/2025 One Taiwan Semi Call option expired out-of-the-money at $158.17 per share and the 100 TSM shares remain in the Covered Calls Advisor Portfolio.
4/14/2025 Closed out this Taiwan Semiconductor Covered Call position by selling the 100 remaining shares at $157.05. 

The overall performance results (including commissions) are as follows:
Covered Calls Cost Basis: $15,957.67
= ($169.83 - $10.26) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$1,025.33
= ($10.26 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (TSM stock sold on 4/14/2025 at $157.05 per share): -$1,288.00
= ($157.05 stock selling price - $169.93 stock purchase price) * 100 shares

Net Loss: -$262.67
= (+$1,025.33 option income +$0.00 dividend income - $1,288.00 capital appreciation) 

Absolute Return-on-Investment: -1.6%
= -$262.67/$15,957.67
Equivalent Annualized Return-on-Investment: -42.9%
= (-$262.67/$15,957.67) * (365/18 days)

April 11th, 2025 Options Expiration Results

The Covered Calls Advisor Portfolio had four Covered Calls positions with April 11th, 2025 options expiration dates.  One position in Microsoft Corporation closed in-the-money so its Call option expired and the shares were called away (i.e. sold) at its $360 strike price.  Three positions in NetApp Inc., Nvidia Corporation, and Taiwan Semiconductor ADR 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 four positions are as follows:

1. Microsoft Corporation (MSFT) -- +1.5% absolute return (equivalent to +49.5% annualized return-on-investment) for the 11 days of this investment.  This Covered Call position was assigned at the $360.00 strike price on its April 11th options expiration date since it closed in-the-money yesterday at $388.06 per share.  The original post detailing this Covered Call position is here. 

2. NetApp Inc. (NTAP) -- This Covered Call position closed yesterday at $82.65 which was below its $86.00 strike price, so the two 4/11/2025 NTAP Call options expired and 200 shares now remain in the Covered Calls Advisor Portfolio.  The original post detailing this position is here.  Early in the upcoming week I will decide to either continue this Covered Calls position by selling 2 Call options against the 200 NetApp Inc. shares currently held (most likely decision) or close out the position by selling the 200 NetApp shares.

3. Nvidia Corporation (NVDA) -- This Covered Calls position closed yesterday at $110.71 per share which was below its $120.00 strike price, so the three 4/11/2025 Nvidia Call options expired and 300 shares now remain in the Covered Calls Advisor Portfolio.  The original post detailing this position is here.  Early next week I will decide to either continue this Covered Calls position by selling 3 Call options against the 300 Nvidia Corp. shares currently held (most likely decision) or close out the position by selling the 300 Nvidia shares.

4. Taiwan Semiconductor ADR (TSM) -- This Covered Call position closed yesterday at $158.17 which was below its $162.50 strike price, so the one 4/11/2025 TSML Call option expired and 100 shares now remain in the Covered Calls Advisor Portfolio.  The original post detailing this position is here.  Because of the elevated volatility that occurs on days with earnings reports and since Taiwan Semi has an earnings report this Thursday, I will close out this position early this week.  As always, I will post the return-on-investment results for this position on the same day that my closing transaction occurs.  

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

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Established Covered Calls in Robinhood Markets Inc.

At 3:43pm ET this afternoon, my short-term Covered Calls net debit limit order position was executed for Robinhood Markets Inc. (ticker HOOD). Five hundred shares were purchased at $39.95 and five April 17th, 2025 Call options were simultaneously sold at the $33.00 strike price at $7.63 per share.  So, the buy/write net debit amount specified at $32.32 per share provides a $.68 per share time value profit potential for this position.  

As detailed below, a potential return-on-investment result is +2.1% absolute return-on-investment (equivalent to +108.6% annualized return-on-investment for the next 7 days) if the Robinhood share price is in-the-money (i.e. above the $33.00 strike price) and therefore assigned on its April 17th, 2025 options expiration date.  The probability this outcome will be achieved was 79.7% when this position was established.  

Robinhood is a $37 billion market cap company in the Investment Banking and Brokerage sub-industry within the Capital Markets industry.  It is the 5th largest company in that sub-industry behind Morgan Stanley, Goldman Sachs, Schwab, and Interactive Brokers.  Something that appeals to me about Robinhood is their highly fintech business model.  Their 47.8% net margin is substantially greater than the 23% to 30% net margin range of MS, GS, and Schwab and they dwarf the 8% of Interactive Brokers.  They are also growing rapidly having reported year-over-year stats recently such as: (1) +8% funded new customers; (2) +45% net new deposits; and (3) +58% assets under custody.  

As Covered Calls investors, we try to take advantage of temporary spikes in Implied Volatility by selling Calls against the stock purchased.  Because of the overall market decline and volatility that has spiked higher, the Implied Volatility of the Call options sold was an incredibly high 146.4 today when this position was established.  So, this position is a very risky one, but one in which selling this deep in-the-money $33.00 strike price serves to mitigate the risk while at the same time establishing the potential for a substantial return-on-investment if the stock price is above the $33.00 strike price on its April 17th options expiration date.  Also as I prefer, the next quarterly earnings reporting date is subsequent to the April 17th options expiration date.    

 
Robinhood Markets Inc. (HOOD) -- New Covered Calls Position

The buy/write net limit order transaction was executed as follows:
4/10/2025 Bought 500 Robinhood Markets shares at $39.95.

4/10/2025 Sold 5 HOOD 4/17/2025 $33.00 Call options @ $7.63 per share.  These deep-in-the-money $33.00 Calls were 17.4% in-the-money when this position was established.  

A possible overall performance result (including commissions) for this Robinhood Covered Calls position is as follows:
Covered Calls Net Investment: $16,163.35
= ($39.95 - $7.63) * 500 shares + $3.35 commission

Net Profit:
(a) Options Income: +$3,811.65
= ($7.63 * 500 shares) - $3.35 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 500 Robinhood shares assigned at the $33.00 strike price at the options expiration): -$3,475.00
+($33.00 strike price - $39.95 stock purchase price) * 500 shares

Total Net Profit Potential: +$336.65
= (+$3,811.65 options income + $0.00 dividend income - $3,475.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.1%
= +$336.65/$16,163.35
Potential Annualized Return-on-Investment: +108.6%
= (+$336.65/$16,163.35) * (365/7 days)

Established Covered Calls in Merck & Co. Inc.

This afternoon, a short-term Covered Calls position was established in Merck & Co. Inc. (ticker MRK) with the purchase of 200 shares at $80.24 per share and two April 17th, 2025 Call options were sold for $6.00 per share at the $75.00 strike price.  The extrinsic value (which represents the maximum profit potential for this position) was $.76 per share [$6.00 Call options premium - ($80.24 stock purchase price - $75.00 strike price)].  A moderately in-the-money Covered Calls position was established with the probability that the Calls will expire in-the-money on the 4/17/2025 options expiration date was 77.4%.  As I prefer, the next quarterly earnings report on April 24th, 2025 is after the April 17th options expiration date.

As shown in my Quality+Growth stock screener results in the table below, Merck meets all nineteen filters including scores in the 90s for both the overall Quality Score and the overall Growth Score filters.  

A potential return-on-investment result is +1.0% absolute return-on-investment (equivalent to a +46.7% annualized return-on-investment for the next 8 days) if the stock is assigned on the April 17th options expiration date. 

Merck & Co. Inc. (MRK) -- New Covered Calls Position
The simultaneous buy/write transaction was as follows:
4/9/2025 Bought 200 shares of Merck & Co. stock @ $80.24 per share.  
4/9/2025 Sold 2 MRK April 17th, 2025 $75.00 Call options @ $6.00 per share.  The Implied Volatility of the Call options was 59.7 when this position was transacted.

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $14,849.34
= ($80.24 - $6.00) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,200.00
= ($6.00 * 200 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If MRK shares assigned with stock above the $75.00 strike price at the April 17th options expiration date): -$1,048.00
= ($75.00 strike price - $80.24 stock purchase price) * 200 shares

Potential Net Profit (If MRK price is above $75.00 strike price at the 4/17/2025 options expiration): +$152.00
= (+$1,200.00 options income + $0.00 dividend income - $1,048.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.0%
= +$152.00/$14,849.34
Potential Equivalent Annualized Return-on-Investment: +46.7%
= (+$152.00/$14,849.34) * (365/8 days)

Covered Calls Position Established in Pinterest Inc.

This afternoon a small-dollar-value and short-term Covered Calls position was established in Pinterest Inc. (ticker PINS) at the $22.00 strike price and for the April 17th, 2025 options expiration date.  My net debit limit order at $21.50 was transacted when 300 shares were purchased at $24.95 and 3 4/17/2025 $22.00 Calls were sold simultaneously at $3.45 per share.  The extrinsic value (which represents the maximum profit potential for this position) was $.50 per share [$3.45 Call options premium - ($24.95 stock purchase price - $22.00 strike price)].  This limit order was filled at 1:33 pm ET and the probability that this position will be in-the-money and therefore assigned on its options expiration date was 75.2% when this order was transacted.

As detailed in the table below of my Next Year and 5-Year PEG Ratios stock screener, Pinterest meets every filter criterion.  Also, the high potential annualized return-on-investment potential for this position is a direct result of the very high 103.9% implied volatility in these Call options when the buy/write transaction was executed.

As detailed below, the potential return-on-investment result is +2.3% absolute return-on-investment in 9 days (equivalent to a +93.0% annualized return-on-investment).  

PINTEREST INC. (PINS) -- New Covered Calls Position

The simultaneous buy/write transaction was as follows:
4/8/2025 Bought 300 shares of Pinterest Inc. stock @ $24.95 per share.  
4/8/2025 Sold 3 Pinterest Inc. April 17th, 2025 $22.00 Call options @ $3.45 per share.
Note: The Implied Volatility of the Call options was 103.9% when this transaction was executed which, as I prefer, is well above the current 49.5 of the S&P 500 Volatility Index (i.e. VIX). 

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $6,452.01
= ($24.95 - $3.45) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,032.99
= ($3.45 * 300 shares) - $2.01
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If Pinterest stock is above $22.00 strike price at the 4/17/2025 options expiration date): -$885.00
= ($22.00 strike price - $24.95 stock purchase price) * 300 shares

Total Net Profit Potential: +$147.99
= (+$1,032.99 options income + $0.00 dividend income - $885.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.3%
= +$147.99/$6,452.01
Potential Equivalent Annualized Return-on-Investment: +93.0%
= (+$147.99/$6,452.01) * (365/9 days)

Continuation of Covered Call Position in Humana Inc.

The Covered Calls Advisor Portfolio has a Covered Calls position in Humana Inc. (ticker HUM) which expired last Friday with the stock at $253.77 which was below the $255.00 strike price.  Early in this morning's trading session, when the stock price had declined further to $244.65, this position was continued by rolling down to the April 17th, 2025 monthly options expiration at the $240.00 strike price by selling-to-open one Humana Call at $23.40 per share.   

As detailed below, a potential outcome for this Humana investment if the stock is in-the-money and therefore assigned on the options expiration date is +7.5% absolute return-on-investment over 28 days (equivalent to +97.7% annualized-return-on-investment) if the stock closes above the $240.00 strike price on the 4/17/2025 options expiration date.   This position demonstrates that if the stock price remains in-the-money on the 4/17/2025 options expiration date, the Humana shares will be sold at the $240.00 strike price which is a substantial 9.9% decline below the original stock purchase price.  However, by selling short-term in-the-money strike prices, the Call premium income received would exceed the 9.9% stock price decline so that a net annualized positive return-on-investment of +97.7% would still be achieved.  The details showing this potential return-on-investment result are as follows:

Humana Inc. (HUM) -- Continuation of Covered Call Position
The simultaneous buy/write transactions was as follows:
3/20/2025 Bought 100 shares of Humana Inc. stock @ $266.35 per share 
3/20/2025 Sold 1 Humana April 4th, 2025 $255.00 Call option @ $20.50 per share
3/28/2025 Ex-dividend at $.885 per share
4/4/2025 Humana stock price was below the $255.00 strike price, so the Call expired and the 100 Humana shares remained in the Covered Calls Advisor Portfolio.
4/7/2025 Continued this Humana Inc. Covered Call position by selling one April 17th, 2025 $240.00 Call option @ $23.40 per share when the stock was trading today at $244.65.  The Implied Volatility of this Call was an amazingly high 133.6 today when it was sold.  

A potential overall performance result (including commissions) would be as follows:
Covered Call Cost Basis: $24,585.67
= ($266.35 - $20.50) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$4,388.66
= ($20.50 + $23.40)* 100 shares - $1.34 commissions
(b) Dividend Income: +$88.50
= $.885 dividend per share x 100 shares
(c) Capital Appreciation (If Humana stock is above the $240.00 strike price and therefore assigned on the 4/17/2025 option expiration date): -$2,635.00
= ($240.00 strike price - $266.35 stock purchase price) * 100 shares

Potential Net Profit (If stock price is above its $240.00 strike price at the 4/17/2025 options expiration date): +$1,842.16
= (+$4,388.66 options income +$88.50 dividend income - $2,635.00 capital appreciation) 

Potential Absolute Return-on-Investment: +7.5%
= +$1,842.16/$24,585.67
Potential Equivalent Annualized Return-on-Investment: +97.7%
= (+$1,842.16/$24,585.67) * (365/28 days)