Covered Call Position Established in IBM Corporation

Today a short-term Covered Call position in IBM Corporation (IBM) was established when one hundred shares were purchased at $217.68 and one July 24th, 2026 Call option was sold at $22.20 per share at the $200.00 strike price.  The buy/write net debit limit order at $195.48 was executed, so the time value was $4.52 per share [$22.20 Call option premium - ($217.68 stock purchase price - $200.00 strike price)].  An in-the-money Covered Call position was established with a 71.0% probability of assignment on the options expiration date when this buy/write limit order was executed. IBM stock was down an intraday record of over 25% this morning after they pre-announced disappointing quarterly revenues and earnings.  I took advantage of the upward spike in implied volatility to 81.7 in the 7/24 $200 Call option and established this IBM Covered Call position.

As detailed below, a potential return-on-investment result is +2.3% absolute return-on-investment (equivalent to +84.3% annualized return-on-investment over the next 10 days) if the stock is assigned on the July 24th, 2026 options expiration date.

IBM Corporation (IBM) -- New Covered Call Position
The simultaneous buy/write transaction today was as follows:
7/14/2026 Bought 100 IBM Corp. shares @ $217.68
7/14/2026 Sold 1 IBM 7/24/2026 $200.00 Call option @ $22.20 per share
Note: the Implied Volatility of the Call was 81.7 when this transaction was executed.  As I prefer, this value greatly exceeds that of the S&P 500 Volatility Index (VIX) which is currently at 16.3.

A possible overall performance result (including commission) for this IBM Covered Call position if assigned on the options expiration date is as follows:
Covered Call Cost Basis: $19,548.67
= ($217.68 - $22.20) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$2,219.33
= ($22.20 * 100 shares) - $.67 commission
(b) Dividend Income $0.00
(c) Capital Appreciation (If IBM shares assigned at the $200.00 strike price on the options expiration date): -$1,768.00
+($200.00 strike price - $217.68 stock purchase price) * 100 shares

Total Net Profit (If IBM shares assigned at the $200.00 strike price at the 7/24/2026 expiration date): +$451.33

= (+$2,219.33 option income + $0.00 - $1,768.00 capital appreciation)

Absolute Return-on-Investment (If IBM shares assigned at the $200.00 strike price on the July 24th, 2026 options expiration date): +2.3%

= +$451.33/$19,548.67

Annualized Return-on-Investment (If IBM stock assigned at the $200.00 strike at the 7/24/2026 options expiration date): +84.3%

= (+$451.33/$19,548.67) * (365/10 days)

Established Covered Calls in NVIDIA Corporation

A Covered Calls position of 15 days duration was established today in NVIDIA Corporation (ticker NVDA).  My buy/write net debit limit order at $184.54 was executed and the time value was $2.96 per share [$11.25 Call options premium - ($195.79 stock purchase price - $187.50 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 $187.50 strike price) on the 7/17/2026 options expiration date was 69.3% when this transaction was executed.  

As detailed below, a potential return-on-investment result if NVIDIA's share price is in-the-money (i.e. above the $187.50 strike price) and therefore assigned on its July 17th, 2026 options expiration date is +1.6% absolute return-on-investment (equivalent to +38.9% annualized return-on-investment for the next 15 days).

NVIDIA Corporation (NVDA) -- New Covered Calls Position

The buy/write net limit order transaction was as follows:
7/2/2026 Bought 200 NVIDIA Corporation shares at $195.79.

7/2/2026 Sold 2 NVIDIA 7/17/2026 $187.50 Call options @ $11.25 per share.  The Implied Volatility of these Calls was 39.4% when this position was established, which is well above (as preferred) the current value of the S&P 500 Volatility Index (i.e. VIX) of 16.2.

A possible overall performance result (including commissions) for this NVIDIA Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $36,909.34
= ($195.79 - $11.25) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$2,248.66
= ($11.25 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 200 NVIDIA shares assigned (i.e. above the $187.50 strike price) on the 7/17/2026 options expiration date): -$1,658.00
+($187.50 strike price - $195.79 stock purchase price) * 200 shares

Total Net Profit Potential (If 200 NVIDIA shares assigned at the $187.50 strike price on the 7/17/2026 options expiration date): +$590.66

= (+$2,248.66 options income + $0.00 dividend income - $1,658.00 capital appreciation)

Potential Absolute Return-on-Investment (If 200 NVIDIA shares assigned (i.e. sold) at the $187.50 strike price on the 7/17/2026 options expiration date): +1.6%

= (+$590.66/$36,909.34)

Potential Annualized Return-on-Investment (If 200 NVIDIA shares assigned at the $187.50 strike price on the 7/17/2026 options expiration date): +38.9%
= (+$590.66/$36,909.34) * (365/15 days)

June 18th, 2026 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions with June 18th, 2026 options expirations and both positions (Insulet Corporation and NVIDIA Corporation) were assigned yesterday so the Call options expired and both Covered Call positions were closed out by selling the stocks at their respective strike prices.  The return-on-investment summary for each position is as follows:

1. Insulet Corporation (PODD) -- +3.0% absolute return-on-investment (equivalent to +49.0% annualized return-on-investment) for the 22 days of this investment.  This Insulet Corp. Covered Call position had a $135.00 strike price and it closed in-the-money at $145.76 yesterday.  The original blog post showing the details of this position is here. 

2. Nvidia Corporation (NVDA) -- +1.9% absolute return-on-investment (equivalent to +61.7% annualized return-on-investment) for the 15 days of this investment.  This NVIDIA Covered Calls position had a $210.00 strike price and it closed in-the-money at $210.69 yesterday.  The original blog post showing the details of this position is here.

Send your questions/comments to the email address shown below on any topics related to the Covered Calls investing strategy.  During my upcoming vacation period, I expect new positions will be more limited than usual and available cash will be maintained in a Schwab Money Market Fund (SWVXX).  However, as always, any new positions I establish will continue to be posted on this blog site when they occur.  

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

June 12th, 2026 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions with June 12th, 2026 options expiration dates.  The position in The Cigna Group closed in-the-money at $298.00 so the Call option expired and the 100 shares were called away (i.e. sold) at the $270.00 strike price.  The other position in Pan American Silver Corporation closed out-of-the-money so the Call option expired and the 300 shares remained in the Covered Calls Advisor Portfolio.  This morning I sold the 300 Pan American shares.  A summary of results for each of these positions is as follows:

1. The Cigna Group (CI) -- +1.7% absolute return (equivalent to +36.3% annualized return-on-investment) for the 17 days of this investment.  This Covered Call position was assigned at the $270.00 strike price since the stock closed in-the-money at $298.00 per share at last Friday's market close.  The original blog post detailing this Covered Call position is here. 

2. Pan American Silver Corporation (PAAS) -- This Covered Call position closed last Friday at $48.14 which was well below its $56.00 strike price, so the three Call option expired and 300 PAAS shares remained in the Covered Calls Advisor Portfolio.  The most recent blog post detailing this position is here.  This morning I sold the 300 shares at $51.935 per share.  The result for this position was -7.1% absolute return (equivalent to -76.6% annualized return-on-investment) for the 34 days of this investment.  

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