Established Covered Calls in NVIDIA Corporation

Today I established a short-term Covered Calls position in NVIDIA Corporation (ticker NVDA).  My buy/write net debit limit order at $210.02 was executed and the time value was $2.48 per share [$9.24 Call options premium - ($219.26 stock purchase price - $212.50 strike price)].  An in-the-money strike price was established with the probability that NVIDIA's stock will close in-the-money (i.e. above the $212.50 strike price) on the 5/29/2026 options expiration date was 69.6% when this transaction was executed.  

I prefer not to hold positions on earnings reporting dates and since NVIDIA reported their earnings yesterday (which were stellar in all respects), I decided to re-establish my normal practice of establishing weekly Covered Call positions in NVIDIA each week.

As detailed below, a potential return-on-investment result if NVIDIA's share price is in-the-money (i.e. above the $212.50 strike price) and therefore assigned on its May 29th, 2026 options expiration date is +1.2% absolute return-on-investment (equivalent to +53.7% annualized return-on-investment for the next 8 days).

NVIDIA Corporation (NVDA) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
5/21/2026 Bought 300 NVIDIA Corporation shares at $219.26.

5/21/2026 Sold 3 NVIDIA 5/29/2026 $212.50 Call options @ $9.24 per share.  The Implied Volatility of these Calls was 39.5 when this position was established, which is well above (as preferred) the current value of VIX.  

A possible overall performance result (including commissions) for this NVIDIA Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $63,008.01
= ($219.26 - $9.24) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$2,769.99
= ($9.24 * 300 shares) - $2.01 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 300 NVIDIA shares assigned (i.e. above the $212.50 strike price) on the 5/29/2026 options expiration date): -$2,028.00
+($212.50 strike price - $219.26 stock purchase price) * 300 shares

Total Net Profit Potential (If 300 NVIDIA shares assigned at the $212.50 strike price on the 5/29/2026 options expiration date): +$741.99

= (+$2,769.99 options income + $0.00 dividend income - $2,028.00 capital appreciation)

Potential Absolute Return-on-Investment (If 300 NVIDIA shares assigned (i.e. sold) at the $212.50 strike price on the 5/29/2026 options expiration date): +1.2%

= (+$741.99/$63,008.01)

Potential Annualized Return-on-Investment (If 300 NVIDIA shares assigned at the $212.50 strike price on the 5/29/2026 options expiration date): +53.7%
= (+$741.99/$63,008.01) * (365/8 days)

Continued Covered Calls Position in IBM Corporation

The Covered Calls Advisor Portfolio has a Covered Calls position in IBM Corporation (ticker IBM) which expired last Friday with the stock at $219.30 which was below the $225.00 strike price.  Today this position was continued by rolling down-and-out to the May 29th, 2026 options expiration date at the $225.50 strike price by selling-to-open two Calls at $5.60 per share when the price of IBM's stock was $222.78.  

As detailed below, a potential outcome for this IBM Covered Calls investment if the stock is in-the-money and therefore assigned on the options expiration date is +3.1% absolute return-on-investment over 25 days (equivalent to +45.0% annualized-return-on-investment) if the stock closes above the $222.50 strike price on the 5/29/2026 options expiration date. 

IBM Corporation (IBM) -- Continuation of Covered Calls Position
The buy/write transaction was:
5/4/2026 Bought 200 IBM shares @ $231.90
5/4/2026 Sold 2 IBM 5/15/2026 $225.00 Call options @ $9.00.  The Implied Volatility of the Calls was 32.3 when this transaction occurred.
5/8/2026 Quarterly ex-dividend of $1.69 per share
5/15/2026 Two IBM Calls expired out-of-the-money, so the 200 shares remained in the Covered Calls Advisor Portfolio.
5/18/2026 Continued Covered Calls position by selling-to-open two 5/29/2026 $222.50 Calls at $5.60 per share when the price of IBM stock was at $222.78.

A possible overall performance result (including commissions) for this IBM Covered Calls position if the stock price is in-the-money on the 5/29/2026 options expiration date is as follows:
Covered Calls Net Investment: $44,581.34
= ($231.90 - $9.00) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$2,917.32
= ($9.00 +5.60) * 200 shares - $2.68 commission
(b) Dividend Income: +$338.00
= ($1.69 dividend per share x 200 shares)
(c) Capital Appreciation (If shares assigned at $222.50 strike price at the 5/29/2026 options expiration date): -$1,880.00 = +($222.50 strike price - $231.90 stock purchase price) * 200 shares

Potential Total Net Profit (If IBM shares assigned at $222.50 at the May 29th expiration): +$1,375.32

= (+$2,917.32 options income + $338.00 dividend income - $1,880.00 capital appreciation)

Potential Absolute Return-on-Investment: +3.1%

= +$1,375.32/$44,581.34

Potential Annualized Return-on-Investment: +45.0%

= (+$1,375.32/$44,581.34) * (365/25 days)

Closed Out Covered Calls Position in Wells Fargo & Company

Last Friday, the Covered Calls position in Wells Fargo & Company (ticker WFC) closed out-of-the-money at $73.42 which was below its $78.00 strike price.  When Wells Fargo's stock price advanced to $74.33 in this afternoon's trading session, I decided to close out the position by selling the 300 shares at a net loss of $776.01.

As detailed below, the return-on-investment results are: -3.3% absolute return (equivalent to -87.2% annualized return-on-investment) for the 14 days of this investment.

Wells Fargo & Company (WFC) -- Closed Out Covered Calls Position
The buy/write transaction was:
5/4/2026 Bought 300 Wells Fargo shares @ $80.07
5/4/2026 Sold 3 Wells Fargo 2/13/2026 $84.00 Call options @ $3.82
5/8/2026 Quarterly ex-dividend of $.45 per share
5/15/2026 Three WFC Call options closed out-of-the-money, so the Call options expired and 300 Wells Fargo shares remained in the Covered Calls Advisor Portfolio.
5/18/2026 Closed out this Wells Fargo Covered Calls position by selling the 300 shares at $74.33 per share.

The overall performance results (including commissions) for this Wells Fargo Covered Calls position are as follows:
Covered Calls Net Investment: $23,210.01
= ($80.07 - $2.71) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$810.99
= ($2.71 * 300 shares) - $2.01 commission
(b) Dividend Income: +$135.00
= ($.45 dividend per share x 300 shares)

(c) Capital Appreciation (300 WFC shares sold at $74.33 per share): -$1,722.00
+($74.33 - $80.07) * 300 shares

Total Net Loss: -$776.01

= (+$810.99 options income + $135.00 dividend income - $1,722.00 capital appreciation)

Absolute Return-on-Investment: -3.3%

= -$776.01/$23,210.01

Annualized Return-on-Investment: -87.2%

= (-$776.01/$23,210.01) * (365/14 days)

May 15th, 2026 Options Expiration Results

The Covered Calls Advisor Portfolio had six Covered Calls positions with May 15th, 2026 options expiration dates.  

• Four Covered Calls positions (Las Vegas Sands, NVIDIA Corporation, Insulet Corporation, and SAP SE ADR) closed in-the-money so their Calls expired and the shares were called away (i.e. sold) at their respective strike prices -- so these four positions achieved their maximum potential return-on-investment results.  
• Two positions in IBM Corporation and Wells Fargo & Company closed out-of-the-money so their Call options expired and the shares remain in the Covered Calls Advisor Portfolio.  Early next week I will decide to either sell these shares or continue these Covered Call positions by selling Calls against the shares now held or sell the shares to close out the positions.  When these transactions occur, I will post the details of each position to-date on this blog.  

A summary of results for each of these six positions (listed below in alphabetical order by ticker symbol) is as follows:

1. IBM Corporation (IBM) -- This Covered Calls position closed yesterday at $219.30 which was below its $225.00 strike price, so the two Call options expired and 200 IBM shares now remain in the Covered Calls Advisor Portfolio.  The original blog post detailing this position is here.  Early in this upcoming week I will decide to either continue this Covered Calls position by selling two Call options against the 200 IBM shares currently held or close out the position by selling these shares.

2. Las Vegas Sands Corporation (LVS) -- +1.9% absolute return (equivalent to +39.2% annualized return-on-investment) for the 18 days of this investment.  This Covered Calls position was assigned at the $51.00 strike price since the stock closed in-the-money at $51.16 per share.  The original recent blog post detailing this Covered Calls position is here. 

3. NVIDIA Corporation (NVDA) -- +1.2% absolute return (equivalent to +45.4% annualized return-on-investment) for the 10 days of this investment.  This Covered Calls position was assigned at the $190.00 strike price since the stock closed in-the-money at $225.32 per share.  The original blog post detailing this Covered Calls position is here. 

4. Insulet Corporation (PODD) -- +1.6% absolute return (equivalent to +63.4% annualized return-on-investment) for the 9 days of this investment.  This Covered Call position was assigned at the $145.00 strike price since the stock closed in-the-money at $147.46 per share.  The original blog post detailing this Covered Call position is here. 

5. SAP SE ADR (SAP) -- +2.7% absolute return (equivalent to +60.9% annualized return-on-investment) for the 16 days of this investment.  This Covered Call position was assigned at the $162.50 strike price since the stock closed in-the-money at $169.48 per share.  The original blog post detailing this Covered Call position is here. 

6. Wells Fargo & Company (WFC) --This Covered Calls position closed yesterday at $73.42 which was below its $78.00 strike price, so the three Call options expired and 300 WFC shares now remain in the Covered Calls Advisor Portfolio.  The original blog post detailing this position is here.  Early in this upcoming week I will decide to either continue this Covered Calls position by selling three Call options against the 300 Wells Fargo shares currently held or close out the position by selling these shares.

As always, I welcome your feedback or questions at my email address shown below on anything related to the Covered Calls investing strategy.

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net