Taiwan Semiconductor ADR (TSM) -- New Covered Call Position
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
A potential overall performance result (including commissions) would be 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 (If TSM stock is above the $162.50 strike price and therefore assigned at the 4/11/2025 option expiration date): -$733.00
= ($162.50 - $169.93) * 100 shares
Potential Net Profit (If stock price is above $162.50 strike price at the 4/11/2025 options expiration): +$292.33
= (+$1,025.33 option income +$0.00 dividend income - $733.00 capital appreciation)
Potential Absolute Return-on-Investment: +1.8%
= +292.33/$15,957.67
Potential Equivalent Annualized Return-on-Investment: +44.6%
= (+292.33/$15,957.67) * (365/15 days)