Covered Call Position Established in T-Mobile US, Inc.

This afternoon a short-term Covered Call position was established in T-Mobile US, Inc. (ticker symbol TMUS).  My buy/write limit order was executed when 100 shares were purchased at $250.33 and 1 September 5th, 2025 weekly Call option was sold at $6.55 per share at the $245.00 strike price.  The time value (aka extrinsic value) profit potential in the Call option was $1.22 per share [$6.55 Call option premium - ($250.33 stock price - $245.00 strike price)] when this transaction executed.  There is also an upcoming ex-dividend of $.88 per share this Friday (August 29th, 2025).  Two potential return-on-investment results for this position are detailed below and include the possibility of early exercise since the ex-dividend is prior to the September 5th, 2025 options expiration date.  When this position was established, the probability that the Call will be in-the-money on the options expiration date was 75.8%.  Important to the Covered Calls Advisor, T-Mobile's next quarterly earnings report on October 23rd is after the September 5th options expiration date. 

Analysts' average target price for T-Mobile is currently $269.28 which is +7.6% above today's stock purchase price.  Fundamentally speaking, T-Mobile is rated by LSEG Stocks Plus Report (on a scale of 1 to 10) with an Average Score of 9 and an Optimized Score of 9.  Technically speaking, TMUS' current rating by MarketEdge is as a Strong Buy.     

As detailed below, two potential return-on-investment results are: 

•  +0.5% absolute return (equivalent to +45.7% annualized return-on-investment for the next 4 days) if the stock is assigned early (on the last business day prior to the August 29th, 2025 ex-dividend date); OR 

• +0.9% absolute return (equivalent to +28.6% annualized return-on-investment over the next 11 days) if the stock is assigned on the September 5th options expiration date.

T-Mobile US, Inc. (TMUS) -- New Covered Call Position

The buy/write transaction was:
8/25/2025 Bought 100 T-Mobile shares @ $250.33.
8/25/2025 Sold 1 T-Mobile 9/5/2025 $245.00 Call option @ $6.55 per share. The Implied Volatility of the Call option was 17.9 when this transaction was executed.
8/29/2025 Upcoming quarterly ex-dividend of $.88 per share.

Two possible overall performance results (including commissions) for this Covered Call position are as follows:
T-Mobile Covered Call Cost Basis: $24,378.67
= ($250.33 - $6.55) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$655.00
= ($6.55 * 100 shares)
(b) Dividend Income (If option exercised early on August 28th, 2025, the business day prior to the August 29th ex-div date): +$0.00; or
(b) Dividend Income (If T-Mobile stock assigned at the September 5th, 2025 options expiration): +$88.00
= ($.88 dividend per share x 100 shares)
(c) Capital Appreciation (If T-Mobile Call option assigned early on August 28th): -$533.00
+($245.00 strike price - $250.33 stock purchase price) * 100 shares; or
(c) Capital Appreciation (If shares assigned at $245.00 strike price on the 9/5/2025 options expiration date): -$533.00
+($245.00 - $250.33) * 100 shares

1. Total Net Profit [If option exercised on Aug. 28th (business day prior to the Aug. 29th ex-dividend date)]: +$122.00

= (+$655.00 option income + $0.00 dividend income - $533.00 capital appreciation); or

2. Total Net Profit (If T-Mobile shares assigned at $245.00 strike price at the August 29th, 2025 options expiration date): +$210.00

= (+$655.00 option income + $88.00 dividend income - $533.00 capital appreciation)

1. Absolute Return (If option exercised early): +0.5%

= +$122.00/$24,378.67

Annualized Return-on-Investment (If option exercised early): +45.7%

= (+$122.00/$24,378.67) * (365/4 days); or

2. Absolute Return (If T-Mobile shares assigned at the $245.00 strike price at the Sept. 5th, 2025 options expiration date): +0.9%

= +$210.00/$24,378.67

Annualized Return-on-Investment (If T-Mobile shares assigned at the $245.00 at the Sept. 5th, 2025 options expiration date): +28.6%

= (+$210.00/$24,378.67) x (365/11 days)

These return-on-investment results will be achieved as long as the stock is above the $245.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $242.90 ($250.33 - $6.55 - $.88) provides 3.0% downside protection below today's stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet must be 'YES' prior to establishing a position.  As shown below with this T-Mobile US, Inc. position, all nine criteria are met.