In this morning's trading session, a Covered Call position was established in Gilead Sciences Inc. (ticker symbol GILD) when the Covered Calls Advisor's buy/write net debit limit order was executed. One hundred shares were purchased at $146.39 and one March 20th, 2026 Call option was sold at $7.87 per share at the $140.00 strike price. Therefore, a net debit price of $138.52 which is a time value of $1.48 per share [$7.87 Call option price - ($146.39 stock price - $140.00 strike price)]. This is a moderately in-the-money position since its probability of closing in-the-money on the 3/20/2026 options expiration date was 73.1% when this position was established. The current average target price of the analysts covering Gilead is $157.08 which is +7.3% above today's stock purchase price.
Gilead Sciences Inc. is a U.S.-based biopharmaceutical company headquartered in Foster City, California, that develops and commercializes medicines for serious diseases including HIV, viral hepatitis, cancer, and other life-threatening conditions, with the core of its portfolio focused on HIV and hepatitis B and C. Founded in 1987, it has become a leading player in antiviral therapies and oncology, with a strong global presence and significant investment in research and development. Gilead focuses on innovative drug discovery, strategic acquisitions, and expanding global access to treatment while maintaining a robust clinical pipeline.
Two potential return-on-investment results for this position are highlighted below and includes the possibility of early assignment since a quarterly ex-dividend of $.82 per share (2.2% annualized dividend yield) goes ex-dividend on March 13th (which is prior to the March 20th options expiration date). Either an early assignment or an assignment on the options expiration date would be a desirable return-on-investment result since they both exceed my preferred minimum annualized return-on-investment criteria (see criteria #8 and #9 at the bottom of this post) when using my nine Dividend Capture Strategy criteria (see
here). Also, as I prefer, there is no intervening quarterly earnings report since Gilead's next quarterly earnings report on April 23rd, 2026 is after this position's March 20th, 2026 options expiration date.
As detailed below, two potential return-on-investment results are:
- +1.1% absolute return (equivalent to +38.6% annualized
return-on-investment for the next 10 days) if the stock is assigned early (business day
prior to the March 13th, 2026 ex-dividend date); OR
- +1.7%
absolute return (equivalent to +35.5% annualized return-on-investment over the next 17 days) if the stock is assigned on the March 20th, 2026 options expiration date.
Gilead Sciences Inc. (GILD) -- New Covered Call Position
The buy/write transaction was:
3/3/2026 Bought 100 Gilead Sciences Inc. shares @ $146.39
3/3/2026 Sold 1 Gilead 3/20/2026 $140.00 Call option @ $7.87 per share. The Implied Volatility of the Call was 31.6 when this transaction occurred which, as I prefer, is above the current S&P 500 Volatility Index (i.e. VIX) of 24.2.
3/13/2026 Upcoming quarterly ex-dividend of $.82 per share
Two possible overall performance results (including commissions) for this Gilead Sciences Covered Call position are as follows:
Covered Call Net Investment: $13,852.67
= ($146.39 - $7.87) * 100 shares + $.67 commission
Net Profit Components:
(a) Options Income: +$786.33
= ($7.87 * 100 shares) - $.67 commission
(b) Dividend Income (If option exercised early on March 12th, the last business day prior to the March 13th ex-div date): +$0.00; or
(b) Dividend Income (If Gilead stock assigned at the March 20th, 2026 options expiration date): +$82.00
= ($.82 dividend per share x 100 shares)
(c) Capital Appreciation (If Gilead Call option assigned early): -$639.00
+($140.00 strike price - $146.39 stock purchase price) * 100 shares; or
(c) Capital Appreciation (If shares assigned at $140.00 strike price at options expiration): -$639.00 = +($140.00 - $146.39) * 100 shares
1. Total Net Profit [If option exercised early]: +$147.33
= (+$786.33 option income +$0.00 dividend income - $639.00 capital appreciation); or
2. Total Net Profit (If Gilead shares assigned at $140.00 strike on the March 20th options expiration date): +$229.33
= (+$786.33 option income +$82.00 dividend income - $639.00 capital appreciation)
1. Absolute Return-on-Investment [If option exercised early on March 12th (business day prior to the March 13th ex-dividend date)]: +1.1%
= +$147.33/$13,852.67
Annualized Return-on-Investment (If option exercised early): +38.8%
= (+$147.33/$13,852.67) * (365/10 days); or
2. Absolute Return-on-Investment (If Gilead shares assigned at the $140.00 strike price at the March 20th, 2026 options expiration date): +1.7%
= +$229.33/$13,852.67
Annualized Return-on-Investment (If Gilead shares assigned at $140.00 at the 3/20/2026 options expiration): +35.5%
= (+$229.33/$13,852.67) * (365/17 days)
At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet (see below) must be 'YES' prior to establishing a new Covered Calls position using the Covered Calls Advisor's Dividend Capture strategy. All nine criteria are achieved for this Gilead Sciences Inc. Covered Call position.
