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%.