Established Covered Calls in Jefferies Financial Group Inc.

This afternoon, a Covered Calls position was established in Jefferies Financial Group Inc. (ticker JEF) with the purchase of 200 shares at $76.36 per share and two February 21st, 2025 monthly Call options were sold for $4.60 per share at the $72.50 strike price.  An in-the-money Covered Calls positions was established with the probability that the Calls will expire in-the-money on the 2/21/2025 options expiration date was 77.5%.  In addition to the $.74 potential time value decay profit at assignment for this position, Jefferies also goes ex-dividend at $.40 per share (2.1% dividend yield) on February 14th which is prior to the February 21st options expiration date -- so this dividend is included in the potential return-on-investment results detailed below.  As I prefer, the next quarterly earnings report on March 26th, 2025 is after the February 21st options expiration date.

Two potential return-on-investment results are: (a) +1.1% absolute return-on-investment (equivalent to +28.9% annualized return-on-investment for the next 14 days) if the stock is assigned early on February 13th (the last trading day prior to the February 14th, 2025 ex-dividend date); OR (b) +1.6% absolute return (equivalent to +27.6% annualized return over the next 21 days) if the stock is assigned on the February 21st, 2025 options expiration date. 

Jefferies Financial Group Inc. (JEF) -- New Covered Calls Position
The simultaneous buy/write transaction was as follows:
1/31/2025 Bought 200 shares of Jefferies Financial stock @ $76.36 per share.  
1/31/2025 Sold 2 JEF Feb. 21st, 2025 $72.50 Call options @ $4.60 per share.
2/14/2024 Upcoming ex-dividend of $.40 per share

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $14,353.34
= ($76.36 - $4.60) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$920.00
= ($4.60 * 200 shares)
(b) Dividend Income (If Jefferies shares assigned on 2/13/2025, the business day prior to the 2/14/2025 ex-dividend date): = +$0.00; or
(b) Dividend Income (If Jefferies shares assigned at the 2/21/2025 options expiration): +$80.00
= $.40 per share x 200 shares
(c) Capital Appreciation (If Jefferies shares assigned early on 2/14/2025): -$772.00
= ($72.50 strike price - $76.36 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If JEF shares assigned with stock above the $72.50 strike price at the Feb. 21st options expiration date): -$772.00
= ($72.50 - $76.36) * 200 shares

1. Potential Net Profit (If Jefferies shares assigned on the Feb. 14th ex-dividend date): +$148.00
= (+$920.00 options income +$0.00 dividend income - $772.00 capital appreciation)
2. Potential Net Profit (If Jefferies stock price is above the $72.50 strike price at the Feb. 21st options expiration): +$228.00
= (+$920.00 options income +$80.00 dividend income - $772.00 capital appreciation)

1. Absolute Return-on-Investment (If Jefferies shares assigned early on the Feb. 14th, 2025 ex-dividend date): +1.1%
= +$148.00/$14,353.34
Equivalent Annualized Return-on-Investment (If assigned early): +28.9%
= (+$148.00/$14,353.34) * (365/14 days)

2. Absolute Return-on-Investment (If Jefferies stock price is above the $72.50 strike price at the December 21st options expiration): +1.6%
= +$228.00/$14,353.34
Equivalent Annualized Return-on-Investment (If assigned on the 2/21/2025 options expiration date): +27.6%
= (+$228.00/$14,353.34) * (365/21 days)