Continued Covered Calls Position in Pan American Silver Corporation

The Covered Calls Advisor Portfolio has a Covered Calls position in Pan American Silver Corporation (ticker PAAS) which expired last Friday with the stock at $53.94 which was well below the $60.00 strike price.  Today I am attempting to repair this now losing position back close to breakeven by continuing this Covered Calls position. This morning, I rolled down-and-out to the June 12th, 2026 options expiration date at the $56.00 strike price by selling-to-open three Calls at $2.50 per share against the 300 PAAS shares currently held when the price of Pan American's stock was $55.32.  

As detailed below, a potential outcome for this Pan American Silver Corporation investment if the stock is in-the-money and therefore assigned on the options expiration date is -0.2% absolute return-on-investment over 31 days (equivalent to -2.7% annualized-return-on-investment) if the stock closes above the $56.00 strike price on the June 12th, 2026 options expiration date.   

 

Pan American Silver Corporation (PAAS) -- Continuation of Covered Calls Position

The buy/write transaction was:

5/12/2026 Bought 300 Pan American Silver shares @ $62.50
5/12/2026 Sold 3 PAAS 5/22/2026 $60.00 Call options @ $3.70 per share.
Note: Implied Volatility (IV) of the Call options was at 54.0 when this position was transacted which, as preferred, is above the current VIX of 18.3.  The probability that these Call options will expire in-the-money on the options expiration date was 64.2% when this position was established.   
5/19/2026 Quarterly ex-dividend of $.18 per share.

5/22/2026 Three Pan American Silver $60.00 Calls expired out-of-the-money, so the 300 shares remained in the Covered Calls Advisor Portfolio.
5/26/2026 Continued Covered Calls position by rolling down-and-out by selling-to-open three 6/12/2026 $56.00 Calls at $2.50 per share when the price of PAAS stock was at $55.32.

A possible overall performance result (including commissions) if this Covered Calls position is in-the-money on the 6/12/2026 options expiration date is as follows:
Pan American Silver Corp. Covered Calls Net Investment: $17,642.01

= ($62.50 - $3.70) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,855.98
= ($3.70 + $2.50) * 300 shares - $4.02 commissions
(b) Dividend Income: +$54.00
= ($.18 dividend per share x 300 shares)

(c) Capital Appreciation (If shares assigned at the $56.00 strike price at the 6/12/2026 options expiration): -$1,950.00 = +($56.00 strike price - $62.50 stock purchase price) * 300 shares

Potential Total Net Profit (If in-the-money and therefore assigned at expiration): -$40.02
= (+1,855.98 options income + $54.00 dividend income - $1,950.00 capital appreciation)

Potential Absolute Return-on-Investment (If stock price is in-the-money and therefore assigned on the 6/12/2026 options expiration date): -0.2% = -$40.02/$17,642.01

Potential Equivalent Annualized-Return-on-Investment: -2.7% 

= (-$40.02/$17,642.01) x (365/31 days)