Today a Covered Calls position was established in Medtronic PLC (ticker symbol MDT) when the Covered Calls Advisor's buy/write limit order was executed -- 300 shares were purchased at $97.94 and 3 January 9th, 2026 Call options were sold at $2.69 at the $96.00 strike price. Given the Covered Calls Advisor's current "Neutral" Overall Market Meter outlook, a slightly in-the-money Covered Calls position was
established -- the probability of being in-the-money on the options expiration date was 71.2% when this position was established. In addition, there is an upcoming ex-dividend of $.71 per share on December 26th, 2025 which provides an annual dividend yield of 2.9% at today's stock purchase price. Potential results for this Covered Calls position, as detailed below, includes the possibility of early exercise since the ex-dividend is prior to the January 9th options expiration date.
As detailed below, two potential return-on-investment results are:
- +0.8% absolute return (equivalent to +31.6% annualized
return-on-investment for the next 9 days) if the stock is assigned early (last trading day
prior to the Dec. 26th ex-dividend date); OR
- +1.5%
absolute return (equivalent to +24.2% annualized return-on-investment over the next 23 days) if the stock is assigned on the January 9th, 2026 options expiration date.
Medtronic PLC (MDT) -- New Covered Calls Position
The buy/write transaction was:
12/17/2025 Bought 300 Medtronic PLC shares @ $97.94
12/17/2025 Sold 3 MDT 1/9/2026 $96.00 Call options @ $2.69
Note 1: the Implied Volatility of the Calls was 15.6 when this transaction executed.
Note 2: the Time Value (aka Extrinsic Value) in the Call options was $.75 per share = [$2.69 Call options premium - ($97.94 stock price - $96.00 strike price)]
12/26/2025 Upcoming quarterly ex-dividend of $.71 per share
Two possible overall performance results (including commissions) for this Medtronic Covered Calls position are as follows:
Covered Calls Net Investment: $28,577.01
= ($97.94 - $2.69) * 300 shares + $2.01 commission
Net Profit Components:
(a) Options Income: +$804.99
= ($2.69 * 300 shares) - $2.01 commission
(b) Dividend Income (If option exercised early on December 24th, the business day prior to the Dec. 26th ex-div date): +$0.00;
or
(b) Dividend Income (If Medtronic stock assigned at the January 9th, 2026 options expiration date): +$213.00
= ($.71 dividend per share x 300 shares)
(c) Capital Appreciation (If Medtronic Call options assigned early on Dec. 24th): -$582.00
+($96.00 - $97.94) * 300 shares; or
(c) Capital Appreciation (If MDT shares assigned at $96.00 strike price at options expiration): -$582.00
+($96.00 - $97.94) * 300 shares
1. Total Net Profit (If option exercised early): +$222.99
= (+$804.99 options income +$0.00 dividend income - $582.00 capital appreciation); or
2. Total Net Profit (If Medtronic shares assigned at $96.00 strike price at the Jan 9th, 2026 options expiration date): +$435.99
= (+$804.99 options income +$213.00 dividend income -$582.00 capital appreciation)
1. Absolute Return-on-Investment (If three MDT Call options exercised early on Dec. 24th): +0.8%
= +$222.99/$28,577.01
Annualized Return-on-Investment (If options assigned early): +31.6%
= (+$222.99/$28,577.01) * (365/9 days); or
2. Absolute Return-on-Investment (If Medtronic shares assigned at $96.00 at the Dec. 26th options expiration date): +1.5%
= +$435.99/$28,577.01
Annualized Return-on-Investment (If MDT shares assigned at $96.00 at the Jan. 9th, 2026 options expiration date): +24.2%
= (+$435.99/$28,577.01) * (365/23 days)
Either
outcome provides a satisfactory return-on-investment result for this
Medtronic investment. These returns will be achieved as long as the stock is
above the $96.00 strike price at assignment. If the stock declines
below the strike price, the breakeven price of $94.54 ($97.94 - $2.69 - $.71)
provides 3.5% downside protection below today's stock purchase
price.
