Early in today's trading session, I closed out the Covered Call positions in Capital One Financial Corporation (COF) and KraneShares CSI China Internet ETF (KWEB). In both positions, the stocks closed out-of-the-money on their options expiration dates and the stocks remained in the Covered Calls Advisor Portfolio. The stocks have continued to decline, so closing them today resulted in a net loss of $830.67 from the Capital One position and $2,043.35 from the KWEB position. Capital One has a large credit card business, and the stock is a casualty of current concerns related to private credit, but which has also impacted public companies in the credit card business. In the case of KWEB, two key negative factors are the renewed trade tensions between the U.S. and China and also new concerns about slowing economic growth in the Chinese economy.
Another reason for closing out these positions and increasing the money market fund component in my Covered Calls Advisor Portfolio stems from my concern on the potential for a significant decline in the overall market during the next several weeks while the war against Iran continues. My total portfolio is now up by +1.9% for 2026 year-to-date and is only 0.8% below its all-time high which occurred on February 25th this year.
The transactions history for these positions and the associated return-on-investment results are detailed below.
1. Capital One Financial Corporation (COF) -- Closed Out Covered Call Position
The buy/write transaction was:
2/5/2026 Bought 100 Capital One Financial shares @ $219.31
2/5/2026 Sold 1 Capital One 2/27/2026 $210.00 Call option @ $13.25 per share. The Implied Volatility of the Calls was 36.5 when this transaction occurred which, as I prefer, is well above the current S&P 500 Volatility Index (i.e. VIX) of 20.6.
2/19/2026 Quarterly ex-dividend of $.80 per share
2/27/2026 Call option closed out-of-the-money, so the Call option expired and 100 COF shares remained in the Covered Calls Advisor Portfolio.
3/5/2026 Sold 100 shares of Capital One Financial at $196.96 per share.
The overall performance results (including commissions) for this Capital One Covered Call position are as follows:
Covered Call Net Investment: $20,606.67
= ($219.31 - $13.25) * 100 shares + $.67 commission
Net Profit Components:
(a) Options Income: +$1,324.33
= ($13.25 * 100 shares) - $.67 commission
(b) Dividend Income: +$80.00
= ($.80 dividend per share x 100 shares)
(c) Capital Appreciation (COF shares sold at $196.96): -$2,235.00 = +($196.96 - $219.31) * 100 shares
Total Net Loss: -$830.67
= (+$1,324.33 option income +$80.00 dividend income - $2,235.00 capital appreciation)
Absolute Return-on-Investment: -4.0%
= -$830.67/$20,606.67
Annualized Return-on-Investment: -52.5%
= (-$830.67/$20,606.67) * (365/28 days)
2. KraneShares CSI China Internet ETF (KWEB) -- Closed Out Covered Calls Position
The net debit limit Buy/Write transaction was as follows:
2/2/2026 Bought 500 shares of KraneShares CSI China Internet ETF @ $35.21 per share.
2/2/2026 Sold 5 KWEB Feb. 13th, 2026 $34.50 Call options @ $1.14 per share. The Implied Volatility of the Calls was 30.5 when this position was established.
2/13/2026 Five Call options closed out-of-the-money, so the Call options expired and 500 KWEB shares remained in the Covered Calls Advisor Portfolio.
3/5/2026 Sold 500 KraneShares CSI China Internet ETF shares at $29.99 per share.
The overall performance result (including commissions) for this CSI China Internet ETF Covered Calls position is as follows:
KWEB Covered Calls Net Investment: $17,038.35
= ($35.21 - $1.14) * 500 shares + $3.35 commission
Net Profit:
(a) Options Income: +$566.65
= ($1.14 * 500 shares) - $3.35 commission
(b) Dividend Income: +$0.00
(c) Net Capital Loss: -$2,610.00
+($29.99 ETF sales price - $35.21 shares purchase price) * 500 shares
Total Net Loss: -$2,043.35
= (+$566.65 options income + $0.00 dividend income - $2,610.00 capital appreciation)
Absolute Return-on-Investment: -12.0%
= -$2,043.35/$17,038.35
Annualized Return-on-Investment: -141.2%
= (-$2,043.35/$17,038.35) * (365/31 days)
