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

Early Assignment of Covered Call Position in Amgen Inc.

I was notified via email early this morning by my broker (Schwab) that the one Amgen Inc. (ticker AMGN) May 22nd, 2026 Call option was exercised early.  Amgen's stock price increased from $328.90 when this position was established to $336.23 at yesterday's market close.  The original $2.10 time value in the Call option when the position was established had declined substantially at yesterday's market close. So, with 7 days remaining until the May 22nd, 2026 options expiration date, the owner of this Call exercised their option to buy the 100 shares at the $322.50 strike price in order to receive today's (May 15th) $2.52 per share ex-dividend and I achieved all of the original $2.10 per share time value as profit.  

Although I will not receive the ex-dividend, I am satisfied with the +59.6% annualized-return-on-investment (aroi) result achieved since it exceeds the 47.6% maximum aroi that might have been achieved if this position instead had remained in-the-money and would have therefore been assigned on its upcoming May 22nd options expiration date.   

The post when this Amgen Covered Call position was originally established is here.  

As detailed below, the return-on-investment result for this Amgen Inc. Covered Call position was +0.7% absolute return in 4 days (equivalent to a +59.6% annualized return-on-investment).

Amgen Inc. (AMGN) -- Covered Call Position Closed by Early Assignment

The detailed transactions for this position were as follows:

5/11/2026 Bought 100 Amgen Inc. shares @ $328.90
5/11/2026 Sold 1 AMGN 5/22/2026 $322.50 Call option @ $8.50 per share.
Note: Implied Volatility (IV) of the Call option was 20.2 when this position was transacted which, as preferred, was above the current VIX of 18.4.   
5/15/2026 Early Assignment of this one Amgen Call option, so the Call expired and 100 Amgen shares were sold at the $322.50 strike price.

The overall performance results (including commissions) for this Amgen Covered Call position are as follows:
Covered Call Net Investment: $32,040.67
= ($328.90 - $8.50) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$849.33
= ($8.50 * 100 shares) - $.67 commission
(b) Dividend Income (Amgen Call option exercised early on May 14th, 2026, the last business day prior to the May 15th ex-div date): +$0.00

(c) Capital Appreciation: -$640.00

= ($322.50 strike price - $328.90 stock purchase price) * 100 shares

Total Net Profit: +$209.33

= (+$849.33 option income + $0.00 dividend income - $640.00 capital appreciation)

Absolute Return-on-Investment: +0.7%

= +$209.33/$32,040.67

Equivalent Annualized Return-on-Investment: +59.6%

= (+$209.33/$32,040.67) * (365/4 days)