Covered Calls Position Established in Sea Limited ADR

A Covered Calls position in Sea Limited ADR (ticker SE) was established today when two hundred shares were purchased at $80.61 and two April 2nd, 2026 Call options were sold at $7.23 per share at the $75.00 strike price.  The buy/write net debit limit order at $73.38 was executed, so the time value was $1.62 per share [$7.23 Call options premium - ($80.61 stock purchase price - $75.00 strike price)].  As I prefer, Sea's next quarterly earnings report is not until May 12th, 2026 which is long after the April 2nd, 2026 options expiration date.  An in-the-money Covered Calls position was established with a 70.7% probability of assignment on the options expiration date when this buy/write limit order was executed. 

Sea Ltd. is a large-cap ($46 billion market cap) company headquartered in Singapore.  It is a consumer internet company with three core businesses -- e-commerce, digital gaming, and fintech services.  The e-commerce business called Shopee is their largest business (by revenue) and is a mobile-centric, social-focused marketplace providing users a shopping environment with integrated payment, logistics, and seller services.  The digital gaming business is called Galena which offers mobile and personal computer online games and develops mobile games for the worldwide market. The fintech services (called SeaMoney) includes mobile wallet services, payment processing, credit, banking, and insurance tech.  Their operations are primarily in Indonesia, Taiwan, Thailand, Singapore, Malaysia, the Philippines, and Brazil.  

Sea appeared in my Key Metrics for Comparing Companies stock screener.  As shown below, it passed all the screener criteria including the fact that the average target price of the 21 analysts currently covering the company is +74.4% above today's stock purchase price.  This is the largest upside potential for all 30 companies in CFRA's Platinum Portfolio.  Also, although Sea's quarterly earnings reports have been erratic compared with analysts' estimates, I like that (unlike most companies) there is a close correlation between their quarterly GAAP and non-GAAP EPS results.  

  

As detailed below, a potential return-on-investment result is +2.2% absolute return-on-investment (equivalent to +57.3% annualized return-on-investment over the next 14 days) if the stock is assigned on the April 2nd, 2026 options expiration date.

Sea Limited ADR (SE) -- New Covered Calls Position
The simultaneous buy/write transaction today was as follows:
3/19/2026 Bought 200 Sea Ltd. shares @ $80.61
3/19/2026 Sold 2 SE 4/2/2026 $75.00 Call options @ $7.23 per share
Note: the Implied Volatility of the Calls was 62.3 when this transaction was executed.  As I prefer, this value exceeds that of the S&P 500 Volatility Index (VIX) which is currently at 25.5.

A possible overall performance result (including commissions) for this Sea Ltd. Covered Calls position if assigned on the options expiration date is as follows:
Covered Calls Cost Basis: $14,677.34
= ($80.61 - $7.23) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,444.66
= ($7.23 * 200 shares) - $1.34 commissions
(b) Dividend Income $0.00
(c) Capital Appreciation (If Sea Ltd. shares assigned at $75.00 strike price at options expiration): -$1,122.00
+($75.00 strike price - $80.61 stock purchase price) * 200 shares

Total Net Profit (If Sea's shares are assigned at the $75.00 strike price at the 4/2/2026 expiration): +$322.66

= (+$1,444.66 options income + $0.00 dividend income - $1,122.00 capital appreciation)

Absolute Return-on-Investment (If SE shares assigned at $75.00 strike price on the April 2nd, 2026 options expiration date): +2.2%

= +$322.66/$14,677.34

Annualized Return-on-Investment (If Sea Ltd. stock assigned at $75.00 strike price at the 4/2/2026 options expiration date): +57.3%

= (+$322.66/$14,677.34) * (365/14 days)

Covered Call Position Established in Microsoft Corporation

Early in this morning's trading session (at 9:35am ET), I purchase 100 Microsoft Corporation (ticker MSFT) shares at $395.625.  Seven minutes later at 9:42am, I sold 1 Microsoft April 2nd, 2026 Call option at the $185.00 strike price at $17.55 per share (when the stock price was $397.70) to establish a Covered Call position.  So, the potential time value profit if the stock is in-the-money and therefore closed out by assignment at expiration is $6.925 per share [$17.55 Call option premium - ($395.625 stock purchase price - $385.00 strike price)].  The probability of assignment on the options expiration date was 70.1% when this Covered Call position was established which is a moderately conservative position established 2.8% in-the-money.  This position avoids the next quarterly earnings report on April 29th which is after the April 2nd options expiration date. 

Microsoft is currently top-rated (5 stars) by both Morningstar and CFRA.  LSEG Stock Reports Plus rates it at 9 in both Overall and Fundamentals (on a scale of 1 to 10).  The average analysts' target price is $595.55 which is +50.5% above today's stock purchase price.  Microsoft also appeared in my "Current and Future Earnings Growers" stock screener (detailed results shown in the table below); and I am also pleased that there are no red flags (i.e. "Warnings") in StockRover's Insight Panel for Microsoft Corporation.  

As detailed below, a potential outcome for this Microsoft Corporation investment is +1.8% absolute return-on-investment for the next 15 days (equivalent to +44.5% annualized-return-on-investment) if the stock closes above the $385.00 strike price on the April 2nd, 2026 options expiration date.

Microsoft Corporation (MSFT) -- New Covered Call Position

This Covered Call position transactions are as follows:
3/18/2026 Bought 100 shares of Microsoft stock @ $395.625 per share.  
3/18/2026 Sold 1 MSFT April 2nd, 2026 $385.00 Call option @ $17.55 per share.  The Implied Volatility of the Call was 29.8 when this transaction was executed.

A possible overall performance result (including commissions) if this position is assigned on its 4/2/2026 option expiration date is as follows:
Microsoft Covered Call Net Investment: $37,808.17
= ($395.625 - $17.55) * 100 shares + $.67 commission

Net Profit Components:
(a) Call Option Income: +$1,754.33
= ($17.55 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Microsoft stock is above the $385.00 strike price at the April 2nd, 2026 option expiration date): -$1,062.50
= ($385.00 strike price - $395.625 stock purchase price) * 100 shares

Potential Total Net Profit (If assigned at expiration): +$691.83
= (+$1,754.33 option income + $0.00 dividend income - $1,062.50 capital appreciation)

Potential Absolute Return-on-Investment: +1.8%
= +$691.83/$37,808.17
Potential Equivalent Annualized-Return-on-Investment: +44.5%
= (+$691.83/$37,808.17) * (365/15 days)

Continuation of Covered Calls Positions in Bank of America, NVIDIA, and Cigna

The Covered Calls Advisor Portfolio had three Covered Calls positions with March 13th, 2026 (last Friday) options expiration dates.  All three positions (Bank of America Corporation, NVIDIA Corporation, and The Cigna Group) closed out-of-the-money so their Calls expired and the shares remained in the Covered Calls Advisor Portfolio.

This morning I decided to extend all three of these Covered Calls positions by two weeks by selling March 27th, 2026 Call options against the shares currently held in the Covered Calls Advisor Portfolio.  

As detailed below, the potential return-on-investment results if the stocks close in-the-money on their March 27th expiration date are:

1. Bank of America Corporation -- -0.9% absolute return-on-investment (equivalent to -9.6% annualized roi) for the 35 days of this investment.

2. NVIDIA Corporation -- +8.2% absolute return-on-investment (equivalent to +106.7% annualized roi) for the 28 days of this investment.

3. The Cigna Group -- +2.5% absolute return-on-investment (equivalent to +25.2% annualized roi) for the 36 days of this investment.

The details for each of these three positions (in alphabetical order) are as follows:

1. Bank of America Corporation (BAC) -- Continuation of this Covered Calls Position

The buy/write transaction was as follows:
2/20/2026 Bought 500 shares of Bank of America Corp. stock @ $51.91 per share 
2/20/2026 Sold 5 BAC March 13th, 2026 $50.00 Call options @ $2.61 per share
Note: The Implied Volatility of these Calls was 30.2 when this position was established.
3/6/2026 Ex-dividend of $.28 per share
3/13/2026 Bank of America stock closed out-of-the-money at $46.72 (i.e. below the $50.00 strike price), so the Call options expired and the 500 shares remain in the Covered Calls Advisor Portfolio.
3/16/2026 Continued this Covered Calls position by selling 5 March 27th, 2026 $47.50 Call options at $1.08 per share when the stock price was trading at $47.39.  The Implied Volatility of these Calls was 34.4% when this transaction was made.

A possible overall performance result (including commissions) if the stock is assigned on the 3/27/2026 options expiration date would be as follows:
Covered Calls Cost Basis: $24,653.35
= ($51.91 - $2.61) * 500 shares + $3.35 commission

Net Profit Components:
(a) Options Income: +$1,838.30
= ($2.61 + $1.08) * 500 shares - $6.70 commissions
(b) Dividend Income: +$140.00
= $.28 per share x 500 shares
(c) Capital Appreciation (If shares above the $47.50 strike price at the March 27th options expiration): -$2,205.00
= ($47.50 - $51.91) * 500 shares

Potential Net Loss (If BAC price is above the $47.50 strike price at the March 27th options expiration): -$226.70
= (+$1,838.30 options income + $140.00 dividend income - $2,205.00 capital appreciation)

Absolute Return-on-Investment (If BAC price is above $47.50 strike price at the March 27th options expiration): -0.9%   = -$226.70/$24,653.35
Equivalent Annualized Return-on-Investment (If assigned on the 3/27/2026 options expiration date): -9.6%
= (-$226.70/$24,653.35) * (365/35 days)

2. NVIDIA Corporation (NVDA) -- Continuation of this Covered Calls Position

Today's buy/write net limit order transaction was as follows:
2/27/2026 Bought 200 NVIDIA Corporation shares at $180.02.

2/27/2026 Sold 2 NVIDIA 3/13/2026 $185.00 Call options @ $4.35 per share.  The Implied Volatility of these Calls was 44.8 when this position was established, well above (as preferred) the VIX which was at 20.7.  
3/11/2026 Ex-dividend of $.01 per share.  This miniscule dividend amount for the largest market cap company is ludicrous. 🤣

3/13/2026 NVIDIA Corporation stock closed out-of-the-money at $180.25 (i.e. below the $185.00 strike price), so the Call options expired and the 200 NVIDIA shares remain in the Covered Calls Advisor Portfolio.
3/16/2026 Continued this Covered Calls position by selling 2 March 27th, 2026 $185.00 Call options at $5.20 per share when the stock price was trading at $184.09.  The Implied Volatility of these Calls was 42.6% when this transaction was made.

A possible overall performance result (including commissions) if this NVIDIA Corporation Covered Calls position is in-the-money on its 3/27/2026 expiration date is as follows:
Covered Calls Net Investment: $35,135.34
= ($180.02 - $4.35) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$1,877.32
= ($4.35 + $5.05) x 200 shares) - $2.68 commissions
(b) Dividend Income: +$2.00 = $.01 per share x 200 shares
(c) Capital Appreciation (If 200 NVIDIA shares assigned (i.e. above the $185.00 strike price) on the 3/27/2026 options expiration date): +$996.00
+($185.00 strike price - $180.02 stock purchase price) * 200 shares

Total Net Profit Potential (If 200 NVIDIA shares assigned at the $185.00 strike price on the 3/27/2026 options expiration date): +$2,875.32

= (+$1,877.32 options income + $2.00 dividend income + $996.00 capital appreciation)

Potential Absolute Return-on-Investment (If 200 NVIDIA shares assigned (i.e. sold) at the $185.00 strike price on the 3/27/2026 options expiration date): +8.2%

= (+$2,875.32/$35,135.34)

Potential Annualized Return-on-Investment (If 200 NVIDIA shares assigned at the $185.00 strike price on the 3/11/2026 options expiration date): +106.7%

= (++$2,875.32/$35,135.34) * (365/28 days)

3. The Cigna Group (CI) -- Continuation of this Covered Call Positionon

The buy/write transaction today was as follows:
2/19/2026 Bought 100 Cigna Group shares @ $287.06
2/19/2026 Sold 1 Cigna 3/13/2026 $275.00 Call option @ $15.56 per share.  
3/5/2026 Upcoming quarterly ex-dividend of $1.56 per share

3/13/2026 The Cigna Group stock closed out-of-the-money at $267.19 (i.e. below the $275.00 strike price), so the Call option expired and the 100 Cigna shares remain in the Covered Calls Advisor Portfolio.
3/16/2026 Continued this Covered Call position by selling 1 March 27th, 2026 $270.00 Call option at $6.70 per share when the stock price was trading at $269.45.  The Implied Volatility of this Call options was 38.4% when this transaction was made.

A possible overall performance result (including commissions) if this Cigna Covered Call position is in-the-money on its 3/27/2026 expiration date is as follows:
Covered Call Net Investment: $35,135.34
= ($180.02 - $4.35) * 200 shares + $1.34 commissions

Net Profit Components:
(a) Option Income: +$2,224.66
= ($15.56 +6.70) * 100 shares - $1.34 commissions
(b) Dividend Income: +$156.00
= ($1.56 dividend per share x 100 shares)

(c) Capital Appreciation (If Cigna shares assigned at the $270.00 strike price at the options expiration): -$1,706.00

+($270.00 - $287.06) * 100 shares

Total Net Profit (If Cigna shares assigned at the March 27th, 2026 options expiration date): +$674.66

= (+$2,224.66 option income + $156.00 dividend income - $1,706.00 capital appreciation)

Potential Absolute Return-on-Investment (If Cigna shares assigned at the March 27th, 2026 options expiration date): +2.5%

= +$674.66/$27,150.67

Potential Annualized Return-on-Investment: +25.2%

= (+$674.66/$27,150.67) *(365/36 days)

March 13th, 2026 Options Expiration Results

The Covered Calls Advisor Portfolio had three Covered Calls positions with March 13th, 2026 options expiration dates.  All three positions (Bank of America Corporation, NVIDIA Corporation, and The Cigna Group) closed out-of-the-money so their Calls 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. Bank of America Corporation (BAC) -- This Covered Calls position closed yesterday at $46.72 which was below its $50.00 strike price, so the five Call options expired and 500 Bank of America 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 five Call options against the 500 BofA shares currently held or close out the position by selling these shares. 

2. NVIDIA Corporation (NVDA) -- This Covered Calls position closed yesterday at $180.25 which was below its $185.00 strike price, so the two Call options expired and 200 NVIDIA 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 NVIDIA shares currently held or close out the position by selling these shares. 

3. The Cigna Group (CI) -- This Covered Call position closed yesterday at $267.19 which was below its $275.00 strike price, so the one Call option expired and 100 Cigna 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 Cigna shares currently held or close out the position by selling these shares. 

During the past month, I have been reducing my long exposure in favor of a higher allocation to cash (i.e. money market fund).  The S&P 500 performance year-to-date is -2.9% and my portfolio is +0.3%.  

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