Covered Call Positions Closed in Akamai Technologies Inc. and AppLovin Corporation

On Friday October 16th, the Covered Call position in Akamai Technologies Inc. (ticker AKAM) closed out-of-the-money at $87.81 which was well below its $105.00 strike price.  Today I decided to close out this position by selling the 100 AKAM shares.  So early in this morning's trading session, I closed out the position at a net loss of $554.67 when I sold the 100 Akamai Technologies shares at $96.00.  

Last Friday on October 23rd, the Covered Call position in AppLovin Corporation (ticker APP) closed out-of-the-money at $260.25 which was below its $262.50 strike price.  Today I closed out this position by selling the 100 AppLovin shares at a net profit of $459.33 when I sold the 100 AppLovin shares at $262.00.  

The transactions history for both Covered Call positions and their associated return-on-investment results are detailed below.

 

1. Akamai Technologies Inc. (AKAM) -- Closed Out this Covered Call Position

The simultaneous buy/write transaction was as follows:
9/28/2026 Bought 100 shares of Akamai Technologies stock @ $110.11 per share.  
9/28/2026 Sold 1 Akamai October 16th, 2026 $105.00 Call option @ $8.57 per share.

10/16/2026 One Akamai $105.00 Call option closed out-of-the-money at $87.81, so the Call expired and 100 AKAM shares remained in the Covered Calls Advisor Portfolio.

10/26/2026 Closed out this Covered Call position by selling the 100 Akamai shares at $96.00 per share. 

The overall performance result (including commissions) was as follows:
Covered Call Cost Basis: $10,154.67
= ($110.11 - $8.57) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$856.33
= ($8.57 * 100 shares) - $.67
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (Akamai stock sold at $96.00): -$1,411.00
= ($96.00 stock selling price - $110.11 stock purchase price) * 100 shares

Total Net Loss: -$554.67
= (+$856.33 option income + $0.00 dividend income - $1,411.00 capital appreciation)

Absolute Return-on-Investment: -5.5%
= -$554.67/$10,154.67
Equivalent Annualized Return-on-Investment: -71.2%
= (-$554.67/$10,154.67) * (365/28 days)

    

2. AppLovin Corporation (APP) -- Closed Out this Covered Call Position

The simultaneous buy/write transaction was as follows:
10/9/2026 Bought 100 shares of AppLovin stock @ $276.98 per share.  
10/9/2026 Sold 1 AppLovin October 23rd $262.50 Call option @ $19.58 per share.

10/23/2026 One AppLovin $262.50 Call option closed out-of-the-money at $260.25, so the Call expired and 100 AppLovin shares remained in the Covered Calls Advisor Portfolio.

10/26/2026 Closed out this Covered Call position by selling the 100 AppLovin shares at $262.00 per share.

The overall performance result (including commissions) was as follows:
Covered Call Cost Basis: $25,740.67
= ($276.98 - $19.58) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$1,957.33
= ($19.58 * 100 shares) - $.67
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (AppLovin stock sold at $262.00 per share): -$1,498.00
= ($262.00 stock selling price - $276.98 stock purchase price) * 100 shares

Total Net Profit: +$459.33
= (+$1,957.33 option income + $0.00 dividend income - $1,498.00 capital appreciation)

Absolute Return-on-Investment: +1.8%
= +$459.33/$25,740.67
Equivalent Annualized Return-on-Investment: +38.3%
= (+$459.33/$25,740.67) * (365/17 days)

October 23rd, 2026 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions (Alphabet Inc. and AppLovin Corporation with October 23rd, 2026 options expiration dates.  Both positions closed out-of-the-money so the Call options expired and the shares remain in the Covered Calls Advisor Portfolio.  A summary for each of these positions is as follows:

1. Alphabet Inc. (GOOGL) -- This Covered Call position closed yesterday at $321.15 which was below its $340.00 strike price, so the one Call option expired and 100 Alphabet Inc. 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 Call position by selling one Call option against the 100 Alphabet shares currently held or close out the position by selling these shares. 

2. AppLovin Corporation (APP) -- This Covered Call position closed yesterday at $260.60 which was below its $262.50 strike price, so the one Call option expired and 100 AppLovin 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 Call position by selling one Call option against the 100 AppLovin 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

Continuation of Covered Call Position in NVIDIA Corporation

The Covered Calls Advisor Portfolio has a Covered Call position in NVIDIA Corporation (ticker NVDA) with 100 shares which expired last Friday with the stock at $214.13 which was below the $230.00 strike price. Today this position was continued by rolling down-and-out to the October 30th, 2026 options expiration date at the $225.00 strike price by selling-to-open one NVDA Call at $3.30 per share today when NVIDIA's stock price was $220.76.  As preferred, the next NVIDIA quarterly earnings report is not until November 17th, which is after the October 30th, 2026 options expiration date. 

As detailed below, a potential outcome for this NVIDIA investment if the stock is in-the-money and therefore assigned on the October 30th, 2026 options expiration date is +0.1% absolute return-on-investment over 23 days (equivalent to +2.1% annualized-return-on-investment) if the stock closes above the $225.00 strike price on the 10/30/2026 options expiration date. The details showing this potential return-on-investment result are as follows:

NVIDIA Corporation (NVDA) -- Continuation of Covered Call Position

The original buy/write net debit limit order transaction was as follows:

10/7/2026 Bought 100 NVIDIA Corporation shares at $236.93.

10/7/2026 Sold 1 NVIDIA 10/16/2026 $230.00 Call option @ $8.95 per share.  The Implied Volatility of this Call option was 30.9 when this position was established.

10/16/2026 One hundred NVIDIA shares closed below the $230.00 strike price at $214.13, so the Call option expired and the 100 NVIDIA shares remained in the Covered Calls Advisor Portfolio.

10/21/2026 Continued this NVIDIA Covered Call position by selling-to-open 1 October 30th, 2026 $225.00 Call option at $3.30 per share when the NVDA stock was trading at $220.76 per share.

A possible overall performance result (including commissions) for this NVIDIA Corporation Covered Call position if the stock is in-the-money and therefore assigned on the 10/30/2026 options expiration date is as follows:

Covered Call Net Investment: $22,798.67
= ($236.93 - $8.95) * 100 shares + $.67 commission

Net Profit:
(a) Option Income: +$1,223.66
= ($8.95 + $3.30) * 100 shares) - $1.34 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 100 NVIDIA shares assigned at the $225.00 strike price at expiration): -$1,193.00
+($225.00 strike price - $236.93 stock purchase price) * 100 shares

Total Net Profit Potential (If 100 NVIDIA shares in-the-money and therefore assigned at the $225.00 strike price at the options expiration date): +30.66
= (+$1,223.66 option income + $0.00 dividend income - $1,193.00 capital appreciation)

Potential Absolute Return-on-Investment: +0.1%
= +$30.66/$22,798.67
Potential Annualized Return-on-Investment: +2.1%
= (+$30.66/$22,798.67) * (365/23 days)

Established Covered Call in Morgan Stanley

A Covered Call position was established in Morgan Stanley (ticker symbol MS) yesterday using my Dividend Capture Strategy (see here) when 100 shares were purchased at $181.43 and 1 November 6th, 2026 Call option was sold at $8.63 per share at the $175.00 strike price.  The net debit limit order at $172.80 was executed, so the time value was $2.20 per share [$8.63 Call option premium - ($181.43 stock purchase price - $175.00 strike price)]. There is also an upcoming quarterly ex-dividend of $1.15 per share on October 30th (an increase of 15% from last year and a current annual dividend yield of 2.5%), so two potential return-on-investment results for this position, as detailed below, include the possibility of early assignment because the ex-dividend is prior to the November 6th, 2026 options expiration date.  

Morgan Stanley's Q3 2025 earnings report was last week so there will be no new earnings report prior to the options expiration date.  The average target price of analysts following Morgan Stanley is $216 (+19.1% above the stock purchase price).   An in-the-money Covered Calls position was established when the probability of the stock closing in-the-money (and therefore being assigned) on the 11/6/2026 options expiration date was 69.0%.  

Most companies in the Financial Sector provide only modest growth prospects, but they often provide good annual dividend yields (such as the 2.5% annual dividend yield for this Morgan Stanley position).  Consequently, the Covered Calls Advisor targets opportunities to use the Dividend Capture Strategy in all Financial Sector Covered Calls positions.  This new November 6th, 2026 Morgan Stanley Covered Call position continues the Dividend Capture Strategy of often selling in-the-money monthly Covered Calls for one of six megacap U.S. banks (Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Wells Fargo) for each options expiration month:
(JPMorgan Chase quarterly for Jan, Apr, July, and Oct options expirations;
Citigroup, Morgan Stanley, and/or Wells Fargo for Feb, May, Aug, and Nov options expirations; and Bank of America and/or Goldman Sachs for Mar, Jun, Sep, and Dec options expirations). 

The goal of these monthly Covered Call positions in these banks is to both provide an opportunity to either: (1) potentially capture the quarterly dividend payment and if the stock price remains above the strike price at options expiration, the maximum possible return-on-investment result on the options expiration date would be achieved; or (2) have the stock assigned early on the last trading day prior to the ex-dividend date in which case the Covered Calls Advisor is usually very pleased since the Dividend Capture Strategy criteria are designed such that most often the annualized return-on-investment for early assignment is somewhat greater than what would be achieved if the stock was instead assigned on its options expiration date (which is the case for this Morgan Stanley position).  So far, applying this approach has provided attractive annualized return results -- significantly better than would be achieved if Covered Calls positions for these bank stocks were instead held in the Covered Calls Advisor Portfolio in the other two non-dividend paying months each quarter.   

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

•  +1.3% absolute return (equivalent to +42.1% annualized return-on-investment for the next 11 days) if the stock is assigned early (on the last business day prior to the October 30th, 2026 ex-dividend date); OR 

• +1.9% absolute return (equivalent to +39.2% annualized return-on-investment over the next 18 days) if the stock is assigned on the November 6th, 2026 options expiration date.

Morgan Stanley (MS) -- New Covered Call Position
The buy/write transaction was:
10/19/2026 Bought 100 Morgan Stanley shares @ $181.43
10/19/2026 Sold 1 Morgan Stanley 11/6/2026 $175.00 Call option @ $8.63
Note: the Implied Volatility of the Call option was 30.2 when this buy/write transaction was executed.
10/30/2026 Upcoming quarterly ex-dividend of $1.15 per share

Two possible overall performance results (including commissions) for this Morgan Stanley Covered Call position are as follows:
Covered Call Cost Basis: $17,280.67
= ($181.43 - $8.63) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$862.33
= ($8.63 * 100 shares) - $.67 commission
(b) Dividend Income (If option exercised early on October 29th, the last business day prior to the October 30th, 2026 ex-div date): +$0.00; or
(b) Dividend Income (If Morgan Stanley stock assigned at the November 6th, 2026 expiration): +$115.00         

= ($1.15 dividend per share x 100 shares)

(c) Capital Appreciation (If Morgan Stanley Call option is assigned early on Oct. 30th): -$643.00
+($175.00 strike price - $181.43 stock purchase price) * 100 shares; or
(c) Capital Appreciation (If shares assigned at $175.00 strike price at the 11/6/2026 options expiration): -$643.00
+($175.00 - $181.43) * 100 shares

1. Total Net Profit [If option exercised early on the last business day prior to the October 30th ex-dividend date)]: +$219.33

= (+$862.33 option income + $0.00 dividend income - $643.00 capital appreciation); or

2. Total Net Profit (If Morgan Stanley shares assigned at $175.00 strike price at the November 6th, 2026 expiration): +$334.33

= (+$862.33 + $115.00 - $643.00)

1. Potential Absolute Return-on-Investment (If option exercised early on Oct. 30th): +1.3%

= +$219.33/$17,280.67

Potential Annualized Return-on-Investment: +42.1%

= (+$219.33/$17,280.67) * (365/11 days); or

2. Potential Absolute Return-on-Investment (If Morgan Stanley shares assigned at $175.00 at the Nov. 6th, 2026 options expiration date): +1.9%

= +$334.33/$17,280.67

Potential Annualized Return-on-Investment (If Morgan Stanley shares assigned at the November 6th options expiration date): +39.2%

= (+$334.33/$17,280.67) * (365/18 days)

Either outcome would provide an attractive return-on-investment result for this Morgan Stanley investment.  These returns will be achieved as long as the stock is above the $175.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $171.65 ($181.43 - $8.63 - $1.15) provides 5.4% downside protection below the stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet must be 'YES' prior to establishing a position.  As shown below with this Morgan Stanley position, all nine criteria were met.