Established Covered Call Position in UnitedHealth Group Inc.

Last Friday on its options expiration date, my Covered Call in UnitedHealth Group closed in-the-money so the maximum profit potential from this position was achieved.  Since UNH has an upcoming ex-dividend of $2.21 on June 16th, 2025 and since it met the criteria of my dividend capture strategy, I decided to establish a new Covered Call position in UnitedHealth Group Inc. (ticker UNH).  

Early in this morning's trading session, one hundred shares were purchased at $303.76 and one June 27th, 2025 Call option was sold at the $290.00 strike price at $16.87 per share--a buy/write net debit transaction of $286.89 per share which provides a maximum $3.11 per share time value profit potential.  The probability of the Call being in-the-money on the options expiration date was 74.1% when this transaction occurred. The upcoming dividend is $2.21 per share (2.9% annual dividend yield) on June 16th which is prior to the June 27th options expiration date, so this dividend is included in the potential return-on-investment results shown below.  Fortunately, there is no UNH quarterly earnings report prior to the 6/27/2025 options expiration date. 

Two potential return-on-investment results for this UnitedHealth Group Inc. Covered Call position are as follows: (a) +1.1% absolute return-on-investment (equivalent to +56.4% annualized return-on-investment) for the next 7 days if the stock is assigned early on the last business day prior to the June 16th ex-dividend date; or (b) +1.9% absolute return-on-investment (equivalent to +37.6% annualized return-on-investment) for the next 18 days if the stock is instead assigned on its June 27th, 2025 options expiration date.

 
UnitedHealth Group Inc. (UNH) -- New Covered Call Position 

The Buy/Write transaction was as follows:
6/9/2025 Bought 100 shares of UnitedHealth Group @ $303.76 per share.  
6/9/2025 Sold 1 UNH June 27th, 2025 $290.00 Call option @ $16.87 per share.  The Implied Volatility of the Calls was 31.0 when this position was established.

6/16/2025 Upcoming ex-dividend of $2.21 per share.  

Two possible overall performance results (including commissions) for this UnitedHealth Group Covered Call position are as follows: 

Covered Call Net Investment: $28,689.67

= ($303.76 - $16.87) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$1,686.33
= ($16.87 * 100 shares) - $.67 commission
(b) Dividend Income: $221.00

= ($2.21 per share x 100 shares)
(c) Capital Appreciation (If shares assigned at $290.00 strike price at the 6/27/2025 options expiration date): -$1,376.00
+($290.00 strike price - $303.76 stock purchase price) * 100 shares

1. Total Net Profit [If stock shares assigned at $290.00 strike price this Friday (the last business day prior to the June 16th ex-dividend date)]: +$310.33

= (+$1,686.33 options income + $0.00 dividend income - $1,376.00 capital appreciation); or

2. Total Net Profit (If stock shares assigned at $290.00 strike price at the 6/27/2025 options expiration date): +$531.33

= (+$1,686.33 option income + $221.00 dividend income - $1,376.00 capital appreciation)

1. Potential Absolute Return-on-Investment (if assigned early on the last trading day prior to the 6/16/2025 ex-dividend): +1.1%

= +$310.33/$28,689.67

Potential Annualized Return-on-Investment: +56.4%

= (+$310.33/$28,689.67) * (365/7 days); or

2. Potential Absolute Return-on-Investment (if assigned on the 6/27/2025 options expiration date): +1.9%

= +$531.33/$28,689.67

Potential Annualized Return-on-Investment: +37.6%

= (+$531.33/$28,689.67) * (365/18 days)