Thursday, December 4, 2025

Covered Call Position Established in Amazon.com Inc.

Today my buy/write net debit limit order was executed at a price of $219.30 when 100 shares of Amazon.com Inc. (ticker symbol AMZN) stock was purchased at $229.91 and 1 December 19th, 2025 $222.50 Call option was sold at $10.61 per share.  The potential time value profit if the stock is in-the-money and therefore closed out by assignment on the options expiration date is $3.20 per share [$10.61 Call option premium - ($229.91 stock purchase price - $222.50 strike price)].  The probability that the Calls will be above the $222.50 strike price on the 12/19/2025 options expiration date when this Covered Calls position was established was 69.0%.

There are 54 analysts following Amazon.com and their average target price is $297.23 (+29.3% above today's stock purchase price).  Also, LSEG Stock Reports Plus has a Buy rating with an Average Score of 8 and an Optimized Score of 9 (on a scale of 1 to 10). Amazon.com also passed all criteria in my customized "Current and Future Earnings Growers" stock screener as detailed in the chart below:


Amazon.com Inc. (AMZN) -- New Covered Call Position
The net debit buy/write limit order was executed as follows:
12/4/2025 Bought 100 shares of Amazon.com stock @ $229.91 per share.  
12/4/2025 Sold 1 AMZN Dec. 19th, 2025 $222.50 Call option @ $10.61 per share.
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Calls was 32.1 when this position was established which, as preferred, is well above the current VIX of 16.1.  

A possible overall performance result (including commissions) if this position is assigned on its 12/19/2025 options expiration date is as follows:
Covered Call Net Investment: $21,930.67
= ($229.91 - $10.61) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$1,060.33
= ($10.61 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Amazon.com stock is above the $222.50 strike price at the December 19th, 2025 options expiration date): -$741.00
= ($222.50 strike price - $229.91 stock purchase price) * 100 shares

Total Net Profit Potential (If assigned at the $222.50 strike price on the Dec. 19th, 2025 options expiration date): +$319.33
= (+$1,060.33 options income + $0.00 dividend income - $741.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.5%
= +$319.33/$21,930.67
Potential Equivalent Annualized-Return-on-Investment: +35.4%
= (
+$319.33/$21,930.67) * (365/15 days)