Established Covered Calls Position in IBM Corporation

Today a short-term Covered Calls position was established in IBM Corp. (ticker symbol IBM) when the Covered Calls Advisor's buy/write limit order was executed -- 200 shares were purchased at $231.90 and two May 15th, 2026 Call options were sold at $9.00 per share at the $225.00 strike price.  Therefore, a net debit price of $222.90 which is a time value of $2.10 per share [$9.00 Call options price - ($231.90 stock price - $225.00 strike price)].  This is a moderately in-the-money position since its probability of closing in-the-money on the 5/15 options expiration date was 69.2% when this position was established.  

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 $1.69 per share (2.9% annualized dividend yield) goes ex-dividend this Friday (May 8th), which is prior to the May 15th options expiration date.  Either result would be attractive since they both substantially exceed my preferred minimum annualized return-on-investment criteria (see criteria #8 and #9 at the bottom of this post) when using my Dividend Capture Strategy.  Also, as I prefer, there is no intervening quarterly earnings report since IBM's next quarterly earnings report on July 22nd, 2026 is after this month's options expiration date.

IBM passed every criterion in my "Sustainable Competitive Advantage" stock screener, which places it in the top 2% of the 1,377 major U.S. companies considered in this stock screener.  The average target price of the 20 analysts following IBM is $294.90 which is +27.2% above today's stock purchase price.  The stock screener criteria and the actual numbers for IBM are shown in the filter breakdown in the table below:  

As detailed below, two potential return-on-investment results are: 

•  +0.9% absolute return (equivalent to +85.9% annualized return for the next 4 days) if the stock is assigned early (business day prior to the May 8th ex-dividend date); OR 

• +1.7% absolute return (equivalent to +56.4% annualized return over the next 11 days) if the stock is assigned on the May 15th, 2026 options expiration date.

IBM Corporation (IBM) -- New 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 Upcoming quarterly ex-dividend of $1.69 per share

Two possible overall performance results (including commissions) for this IBM Covered Calls position are as follows:
Covered Calls Net Investment: $44,581.34
= ($231.90 - $9.00) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,799.66
= ($9.00 * 200 shares) - $1.34 commission
(b) Dividend Income (If option exercised early on May 7th, the last business day prior to the May 8th ex-div date): +$0.00; or
(b) Dividend Income (If IBM stock assigned at the May 15th, 2026 options expiration date): +$338.00
= ($1.69 dividend per share x 200 shares)
(c) Capital Appreciation (If IBM Call options assigned early): -$1,380.00
+($225.00 strike price - $231.90 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If shares assigned at $225.00 strike price at options expiration): -$1,380.00 = +($225.00 - $231.90) * 200 shares

1. Total Net Profit [If options exercised early]: +$419.66

= (+$1,799.66 options income +$0.00 dividend income -$1,380.00 capital appreciation); or

2. Total Net Profit (If IBM shares assigned at $225.00 at the May 15th expiration): +$757.66

= (+$1,799.66 options income +$338.00 dividend income -$1,380.00 capital appreciation)

1. Absolute Return-on-Investment [If option exercised early on May 7th (business day prior to the 5/8/2026 ex-dividend date)]: +0.9%

= +$419.66/$44,581.34

Annualized Return-on-Investment (If option exercised early): +85.9%

= (+$419.66/$44,581.34) * (365/4 days); or

2. Absolute Return-on-Investment (If IBM shares assigned at $225.00 at the May 15th, 2026 options expiration): +1.7%

= +$757.66/$44,581.34

Annualized Return-on-Investment (If IBM shares assigned at $225.00 at the May 15th options expiration date): +56.4%

= (+$757.66/$44,581.34) * (365/11 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 IBM Covered Calls position.

May 1st Option Expiration Results

The Covered Calls Advisor Portfolio had one Covered Call position in Cheniere Energy Inc. (LNG) with a May 1st, 2026 options expiration.  The stock closed in-the-money yesterday, so the Call option was closed with no remaining time value, so the 100 LNG shares were sold at the strike price. The return-on-investment details are as follows:

Cheniere Energy Inc. (LNG) -- +2.1% absolute return-on-investment (equivalent to +44.8% annualized return-on-investment) for the 17 days of this investment.  This Cheniere Energy position had a $250.00 strike price and the stock closed at $270.12 yesterday.  The original blog post showing the details of this position is here. 

I welcome your emails with your questions/comments at the email address shown below on any topics related to the Covered Calls investing strategy. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Established Covered Calls in NVIDIA Corporation

Today a short-term Covered Calls position of 8 days duration in NVIDIA Corporation (ticker NVDA).  My buy/write net debit limit order at $192.42 was executed and the time value was $2.58 per share [$8.39 Call options premium - ($200.81 stock purchase price - $195.00 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 $195.00 strike price) on the 5/8/2026 options expiration date was 67.7% when this transaction was executed. 

The current average target price of Wall Street analysts is now $264.95 (+31.9% above today's purchase price).  Today's position continues my recent history of establishing NVIDIA Covered Call positions with expiration dates every week.  

As detailed below, a potential return-on-investment result if NVIDIA's share price is in-the-money (i.e. above the $195.00 strike price) and therefore assigned on its May 8th, 2026 options expiration date is +1.3% absolute return-on-investment (equivalent to +61.0% 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:
4/30/2026 Bought 200 NVIDIA Corporation shares at $200.81.

4/30/2026 Sold 2 NVIDIA 5/8/2026 $195.00 Call options @ $8.39 per share.  The Implied Volatility of these Calls was 41.1 when this position was established, which is well above (as preferred) the VIX which was 17.4.  

A possible overall performance result (including commissions) for this NVIDIA Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $38,485.34
= ($200.81 - $8.39) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$1,676.66
= ($8.39 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 200 NVIDIA shares assigned (i.e. above the $195.00 strike price) on the 5/8/2026 options expiration date): -$1,162.00
+($195.00 strike price - $200.81 stock purchase price) * 200 shares

Total Net Profit Potential (If 200 NVIDIA shares assigned at the $195.00 strike price on the 5/8/2026 options expiration date): +$514.66

= (+$1,676.66 options income + $0.00 dividend income - $1,162.00 capital appreciation)

Potential Absolute Return-on-Investment (If 200 NVIDIA shares assigned (i.e. sold) at the $195.00 strike price on the 5/8/2026 options expiration date): +1.3%

= (+$514.66/$38,485.34)

Potential Annualized Return-on-Investment (If 200 NVIDIA shares assigned at the $195.00 strike price on the 5/8/2026 options expiration date): +61.0%
= (+$514.66/$38,485.34) * (365/8 days)

Covered Call Position Established in Barrick Mining Corporation

Several readers of this blog have indicated that they have difficulty developing a diversified portfolio of Covered Calls because of the total cost of having multiple positions when a single Covered Call of 100 shares for a company at $100 per share would require a $10,000 investment.  So, for example, a portfolio of 8 companies averaging $10,000 each would require $80,000 which is prohibitive for many investors.  So, today I am providing an example of a relatively low-cost Covered Call position in Barrick Mining Corporation (ticker B).  

This position was established today when one hundred shares were purchased at $38.48 and one May 8th, 2026 Call option was sold at $2.22 per share at the $37.00 strike price.  So as shown in the details below, this position was established at a reasonably small cost basis at only $3,626.67. My buy/write net debit limit order at $36.26 was executed, so the time value was $.74 per share [$2.22 Call option premium - ($38.48 stock purchase price - $37.00 strike price)].  As I prefer, Barrick's next quarterly earnings report on May 11th, 2026 is after the May 8th, 2026 options expiration date.  An in-the-money Covered Call position was established with a 64.5% probability of assignment on the options expiration date when this buy/write limit order was executed. 

Barrick Mining Corporation is one of the world's largest gold and copper producers, operating a diversified portfolio of mines across North America, Africa, the Middle East, and South America. Full-year 2025 gold production reached 3.26 million ounces and copper production 220,000 tonnes, both in line with guidance, underpinning a financially exceptional year. The company generated record annual operating cash flow of $7.7 billion and free cash flow of $3.9 billion, while net earnings of $5.0 billion and a year-end cash balance of $6.7 billion left Barrick in a net cash position of $2 billion -- a notably strong balance sheet for a major miner. Looking ahead, Barrick's strategy through 2030 is focused on disciplined growth and portfolio quality, including a significant expansion of its copper footprint to capitalize on rising demand tied to electrification and the global energy transition, while a planned IPO of its premier North American gold assets (including stakes in Nevada Gold Mines and Pueblo Viejo) is expected to be completed by late 2026 and is seen by the Board as the best path to maximizing shareholder value.

Barrick met all criteria in several of my custom stock screeners.  Additionally, the 15 analysts currently covering the company have an average target price of $56.56 for the stock (+47.0% above today's stock purchase price).  

 As detailed below, a potential return-on-investment result is +2.0% absolute return-on-investment (equivalent to +82.0% annualized return-on-investment over the next 9 days) if the stock is assigned on the May 8th, 2026 options expiration date.

Barrick Mining Corporation (B) -- New Covered Call Position
The simultaneous buy/write transaction today was as follows:
4/29/2026 Bought 100 Barrick Mining Corporation shares @ $38.48
4/29/2026 Sold 1 Barrick 5/8/2026 $37.00 Call option @ $2.22 per share
Note: the Implied Volatility of the Call was 59.1 when this transaction was executed.  As I prefer, this value exceeds that of the S&P 500 Volatility Index (VIX) which is currently at 18.5.

A possible overall performance result (including commissions) for this Barrick Mining Covered Call position if assigned on the options expiration date is as follows:
Covered Call Cost Basis: $3,626.67
= ($38.48 - $2.22) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$221.33
= ($2.22 * 100 shares) - $.67 commissions
(b) Dividend Income $0.00
(c) Capital Appreciation (If Barrick shares assigned at $37.00 strike price on the options expiration date): -$148.00
+($37.00 strike price - $38.48 stock purchase price) * 100 shares

Total Net Profit (If Barrick shares assigned at the $37.00 strike price at the May 8th, 2026 options expiration date): +$73.33

= (+$221.33 Call option income + $0.00 dividend income - $148.00 capital appreciation)

Absolute Return-on-Investment (If Barrick shares assigned at $37.00 strike price on the May 8th, 2026 options expiration date): +2.0%

= +$73.33/$3,626.67

Annualized Return-on-Investment (If Barrick's stock is assigned at $37.00 at the 5/8/2026 options expiration date): +82.0%

= (+$73.33/$3,626.67) * (365/9 days)