Established Covered Call in NVIDIA Corporation

An in-the-money Covered Call position was established early in this morning's trading session in NVIDIA Corporation (ticker NVDA).  My net buy/write limit order at $167.79 was executed by simultaneously purchasing one hundred shares at $178.19 and selling one February 20th, 2026 Call option at the $172.50 strike price at $10.40 per share, which provides a $4.71 per share = [$10.40 Call option premium received - ($178.19 stock purchase price - $172.50 option strike price)] time value profit potential.  This new position continues my recent practice of having a NVIDIA Covered Call position expiring each week.  An in-the-money Covered Call position was established for this new position with the probability that NVIDIA's stock will close in-the-money on the 2/20/2026 options expiration date was 61.8% when this transaction was executed.  As I prefer, the next earnings report on February 25th, 2026 is after the February 20th, 2026 options expiration date. 

As detailed below, a potential return-on-investment result is +2.8% absolute return-on-investment (equivalent to +63.9% annualized return-on-investment for the next 16 days) if NVIDIA's share price is in-the-money (i.e. above the $172.50 strike price) and therefore assigned on its February 20th, 2026 options expiration date.  

NVIDIA Corporation (NVDA) -- New Covered Call Position

Today's buy/write net limit order transaction was as follows:
2/4/2026 Bought 100 NVIDIA Corporation shares at $178.19.

2/4/2026 Sold 1 NVIDIA 2/20/2026 $172.50 Call option @ $10.40 per share.  

A possible overall performance result (including commissions) for this NVIDIA Corporation Covered Call position is as follows:
Covered Call Net Investment: $16,779.67
= ($178.19 - $10.40) * 100 shares + $.67 commission

Net Profit:
(a) Option Income: +$1,039.33
= ($10.40 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 100 NVIDIA shares assigned at the $172.50 strike price at expiration): -$569.00
+($172.50 strike price - $178.19 stock purchase price) * 100 shares

Total Net Profit Potential (If 100 NVIDIA shares in-the-money and therefore assigned at the $172.50 strike price at the options expiration date): +$470.33
= (+$1,039.33 option income + $0.00 dividend income - $569.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.8%
= +$470.33/$16,779.67
Potential Annualized Return-on-Investment: +63.9%
= (+$470.33/$16,779.67) * (365/16 days)

Established Covered Calls Position in KraneShares CSI China Internet ETF

A short-term in-the-money Covered Calls position was established today in KraneShares CSI China Internet ETF (ticker KWEB).  Five hundred shares were purchased at $35.21 and five February 13th, 2026 Call options were sold at the $34.50 strike price at $1.14 per share--a buy/write net debit limit transaction of $34.07 per share which provides a maximum $.43 per share [$1.14 Call options premium - ($35.21 stock purchase price - $34.50 strike price)] time value profit potential.  The probability of the Calls being in-the-money on the options expiration date was 63.4% when this transaction occurred. 

As detailed below, a potential result is +1.2% absolute return-on-investment (equivalent to +41.2% annualized return-on-investment for the next 11 days) if KWEB's share price is in-the-money (i.e. above the $34.50 strike price) and therefore assigned on its February 13th, 2026 options expiration date.

 
KraneShares CSI China Internet ETF (KWEB) -- New Covered Calls Position 

The net debit limit Buy/Write transaction was as follows:
2/2/2026 Bought 500 shares of KraneShares CSI China Internet ETF @ $35.21 per share.  
2/2/2026 Sold 5 KWEB Feb. 13th, 2026 $34.50 Call options @ $1.14 per share.  The Implied Volatility of the Calls was 30.5 when this position was established.  

A possible overall performance result (including commissions) for this CSI China Internet ETF Covered Calls position is as follows: 

KWEB Covered Calls Net Investment: $17,038.35

= ($35.21 - $1.14) * 500 shares + $3.35 commission

Net Profit:
(a) Options Income: +$566.65
= ($1.14 * 500 shares) - $3.35 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 500 CSI China Internet ETF shares assigned at $34.50 strike price at expiration): -$355.00
+($34.50 strike price - $35.21 shares purchase price) * 500 shares

Total Net Profit Potential (If 500 CSI China Internet ETF shares are assigned because they are in-the-money at the options expiration date): +$211.65
= (+$566.65 options income + $0.00 dividend income - $355.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.2%
= +$211.65/$17,038.35
Potential Annualized Return-on-Investment: +41.2%
= (+$211.65/$17,038.35) * (365/11 days)

Covered Call Position Closed in Palo Alto Networks Inc.

At last Friday's weekly options expiration, three Covered Calls positions closed in-the-money each with a net profitable outcome, and one Covered Call position in Palo Alto Networks Inc. (ticker PANW) closed out-of-the-money at $176.97 which was well below its $185.00 strike price (see here).  

Software stocks (and even Cybersecurity Software stocks like Palo Alto) are currently underperforming the overall market over concerns about how significantly AI developments might negatively affect Software companies' future growth prospects.  For this reason, and also since I prefer to avoid holding stocks on their earnings reporting date (and Palo Alto has an upcoming quarterly earnings report on February 12th), I decided to close out this position by selling the 100 PANW shares.  So early in this morning's trading session, I closed out the position at a net loss of $460.67 when I sold the 100 Palo Alto Networks' shares at $177.36.  The transactions history for this Palo Alto Networks Covered Call position and its associated return-on-investment results are detailed below.

Palo Alto Networks Inc. (PANW) -- Covered Call Position Closed Out

The original buy/write net debit limit order transaction was as follows:
1/15/2026 Bought 100 Palo Alto Networks shares at $189.28.

1/15/2026 Sold 1 Palo Alto Networks 1/30/2026 $185.00 Call option @ $7.32 per share. The Implied Volatility of this Call option was 31.5 when this position was established. 

1/30/2026 One PANW $185.00 Call option closed out-of-the-money at $176.97, so the Call option expired and 100 PANW shares remained in the Covered Calls Advisor Portfolio.

2/2/2026 Closed out this Covered Call position by selling the 100 Palo Alto Networks shares at $177.36 per share. 

The overall performance results (including commissions) for this Palo Alto Networks Covered Call position are as follows:
Covered Call Net Investment: $18,196.67
= ($189.28 - $7.32) * 100 shares + $.67 commission

Net Profit:
(a) Option Income: +$731.33
= ($7.32 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (100 Palo Alto Networks shares sold at $177.36 per share): -$1,192.00

+($177.36 stock selling price - $189.28 stock purchase price) * 100 shares

Total Net Loss: -$460.67

= (+$731.33 option income + $0.00 dividend income - $1,192.00 capital loss)

Absolute Return-on-Investment: -3.5%

= -$460.67/$13,336.67

Annualized Return-on-Investment: -70.0%

= (-$460.67/$13,336.67) * (365/18 days)

January 30th, 2026 Options Expiration Results

The Covered Calls Advisor Portfolio had four Covered Calls positions with January 30th, 2026 options expiration dates.  Three positions (Amazon.com Inc., Dexcom Inc., and NVIDIA Corporation), closed in-the-money so their Calls expired and the shares were called away (i.e. sold) at their respective strike prices.  One position in Palo Alto Networks Inc. closed out-of-the-money so its Call option expired and the shares remain in the Covered Calls Advisor Portfolio.  A summary of results for each of these positions (in alphabetical order) is as follows:

1. Amazon.com Inc. (AMZN) -- +1.4% absolute return (equivalent to +52.7% annualized return-on-investment) for the 10 days of this investment.  This Covered Call position was assigned at the $225.00 strike price since the stock closed in-the-money at $239.30 per share.  The original blog post detailing this Covered Call position is here. 

2. Dexcom Inc. (DXCM) -- +1.8% absolute return (equivalent to +40.2% annualized return-on-investment) for the 16 days of this investment.  This Covered Calls position was assigned at the $66.00 strike price since the stock closed in-the-money at $73.04 per share.  The original blog post detailing this Covered Calls position is here.    

3. NVIDIA Corporation (NVDA) -- +6.8% absolute return (equivalent to +77.5% annualized return-on-investment) for the 32 days of this investment.  This Covered Call position was assigned at the $187.50 strike price since the stock closed in-the-money at $191.13 per share.  The most recent blog post detailing this Covered Call position is here.    

4. Palo Alto Networks Inc. (PANW) -- This Covered Call position closed yesterday at $176.97 which was well below its $185.00 strike price, so the one Call option expired and 100 Palo Alto Network 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 a Call option against the 100 Palo Alto shares currently held or close out the position by selling these shares. 

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