Early Assignment of Two Bank of America Corp. Covered Calls Positions

This morning the Covered Calls Advisor received email and text notifications from my broker (Schwab) that both Covered Calls positions in Bank of America Corp. (ticker BAC) were assigned early.  As detailed below, these two positions were established on different dates, but both were established at the $25.00 strike price and for the December 15th expiration date.  This early assignment occurred because of today's ex-dividend of $.12 per BAC share.  With the stock price closing at $28.16 yesterday, the Dec 15th $25.00 Calls were well in-the-money, so the Call options owners exercised their options early to purchase the stock in order to capture today's dividend.

Early exercise by the owners of these Call options was plausible since there was $0.115 per share [$3.275 midpoint of Call options' $3.25/$3.30 bid/ask price - ($28.16 current stock price - $25.00 strike price)] time value remaining in these Call options.  The Call owners were willing to immediately forego the remaining $0.115 per share time value by exercising their option to buy the shares (in order to capture today's $0.12 per share ex-dividend). 

The Covered Calls Advisor preferred this early assignment outcome instead of keeping both of these Covered Calls positions and capturing the $0.12 per share ex-dividend today since these early assignments resulted in higher annualized return-on-investments rather than if the positions had instead not been assigned until the December 15th options expiration date.

As detailed below, the actual return-on-investment results achieved for these BAC Covered Calls positions was:

• For Position #1:  A +1.1% absolute return (equivalent to +19.3% annualized return) for the 21 days this position was held.                                                                                               Note: This +19.3% annualized return-on-investment exceeds the +15.6% that would have been achieved if the position was instead exercised at the December 15th expiration. 
• For Position #2:  A +1.4% absolute return (equivalent to +33.0% annualized return) for the 15 days this position was held.                                                                                       Note: This +33.0% annualized return-on-investment exceeds the +21.7% that would have been achieved if the position was instead exercised at the December 15th expiration. 

The Covered Calls Advisor's Dividend Capture Strategy spreadsheet has been working nicely.  In addition to these Bank of America positions, advantageous early assignments in recent months have occurred for Covered Calls positions in Las Vegas Sands, Goldman Sachs, PulteGroup, Kohl's, Intel, JPMorgan Chase, and MGM Resorts.  Consequently, the Covered Calls Advisor plans to continue to seek these types of investment opportunities.


1. Bank of America Corp. (BAC) -- Covered Calls Position #1 Closed

The transactions were as follows:
11/09/2017 Bought 1,000 shares of Bank of America stock @ $26.29 per share 
11/09/2017 Sold 10 Bank of America Dec 15th, 2017 $25.00 Call options @ $1.57 per share
Note: this was a simultaneous Buy/Write transaction
11/30/2017  10 BAC Dec 15th, 2017 $25.00 Call options exercised, so 1,000 shares of BAC stock sold at $25.00 strike price

The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $24,731.65
= ($26.29 - $1.57)* 1,000 shares + $11.65 commission

Net Profit Components:
(a) Options Income: +$1,570.00
= ($1.57* 1,000 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation: -$1,294.95
= ($25.00 -$26.29)* 1,000 shares - $4.95 commission

Total Net Profit: +$275.05
= (+$1,570.00 options income +$0.00 dividend income -$1,294.95 capital appreciation)

Absolute Return: +1.1%
= +$275.05/$24,731.65
Equivalent Annualized Return: +19.3%
= (+$275.05/$24,731.65)*(365/21 days)


2. Bank of America Corp. (BAC) -- Covered Calls Position #2 Closed

The transactions were as follows:
11/15/2017 Bought 1,000 shares of Bank of America stock @ $25.83 per share 
11/15/2017 Sold 10 Bank of America Dec 15th, 2017 $25.00 Call options @ $1.17 per share
Note: this was a simultaneous Buy/Write transaction
11/30/2017  10 BAC Dec 15th, 2017 $25.00 Call options exercised, so 1,000 shares of BAC stock sold at $25.00 strike price

The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $24,671.65
= ($25.83 - $1.17)* 1,000 shares + $11.65 commission

Net Profit Components:
(a) Options Income: +$1,170.00
= ($1.17* 1,000 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$834.95
= ($25.00 -$25.83)* 1,000 shares - $4.95 commission

Total Net Profit: +$335.05
= (+$1,170.00 options income +$0.00 dividend income -$834.95 capital appreciation)

Absolute Return: +1.4%
= +$335.05/$24,671.65
Equivalent Annualized Return: +33.0%
= (+$335.05/$24,671.65)*(365/15 days)

Covered Call Established in Lam Research Corp.

Today, a Covered Calls position was established in Lam Research Corp. (ticker LRCX) for the December 15th expiration and at the $185.00 strike price.   Given the Covered Calls Advisor's current Overall Market Meter sentiment of Neutral, a relatively conservative in-the-money position was established.

The Implied Volatility of the Dec 15th $185.00 Call options was 34.7 when this position was established.  With the sharp decline in semiconductor stocks today, LRCX's Implied Volatility spiked up dramatically to its highest level in almost 2 years.  Selling this Covered Call at this time seems very advantageous, especially since there is no quarterly earnings report prior to expiration.  In addition there is an upcoming ex-dividend of $.50 next Tuesday (Dec. 5th) which is included in the detailed analysis below.  Furthermore, Lam Research is either 'Buy' or 'Outperform' rated by 15 of the 18 Analysts that cover its stock according to Reuters. 

As detailed below, a potential outcome for this investment is +1.8% absolute return-on-investment for the next 17 days (equivalent to +38.3% on an annualized return basis) if the stock closes above the $185.00 strike price on the December 15th options expiration date.

Lam Research Corp. (LRCX) -- New Covered Calls Position

The transactions were as follows:
11/29/2017 Bought 100 shares of Lam Research stock @ $193.48 per share 
11/29/2017 Sold 1 Lam Research Dec 15th, 2017 $185.00 Call option @ $11.28 per share
Note: this was a simultaneous Buy/Write transaction
12/05/2017 Upcoming ex-dividend of $.50 per share

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $18,225.62
= ($193.48 - $11.28)* 100 shares + $5.62 commission

Net Profit Components:
(a) Option Income: +$1,128.00
= ($11.28 * 100 shares)
(b) Dividend Income: +$50.00
= $.50 per share * 100 shares 
(c) Capital Appreciation (If LRCX is above $185.00 strike price at Dec 15th expiration): -$852.95
= ($185.00 -$193.48)* 100 shares - $4.95 commission

Potential Total Net Profit (If assigned at expiration): +$325.05
= (+$1,128.00 option income +$50.00 dividend income -$852.95 capital appreciation)

Absolute Return: +1.8%
= +$325.05/$18,225.62
Equivalent Annualized Return: +38.3%
= (+$325.05/$18,225.62)*(365/17 days)

The downside 'breakeven price' at expiration is at $181.70 ($193.48 - $11.28 - $.50), which is 6.1% below the current market price of $193.48.  This is substantial protection given the relatively high +38.3% potential annualized ROI for this investment.

Using the Black-Scholes Options Pricing Model, the probability of making a profit (if held until the December 15th, 2017 options expiration) for this Lam Research Covered Call position is 72.0%, so the expected value annualized ROI of this investment (if held until expiration) is +27.6% (+38.3% * 72.0%), a nice expected value profit for this moderately in-the-money Covered Call position.   

Covered Calls Established in Sinclair Broadcast Group, Inc.

Today, a Covered Calls positions was established in Sinclair Broadcast Group, Inc. (ticker SBGI) for the December 15th expiration and at the $31.00 strike price.   Given the Covered Calls Advisor's current Overall Market Meter sentiment of Neutral, a relatively conservative in-the-money position was established.

The Implied Volatility of the Dec 15th $31.00 Call options was 38.2 when this position was established.  This is much higher than the average Historic Volatility for Sinclair so far this year, so selling these Call options premiums at this time seems very advantageous, especially since there is no quarterly earnings report prior to expiration.  There is an upcoming ex-dividend of $.18 this Thursday (Nov. 30th) which is included in the analysis below.

Sinclair is 'Buy'-rated by Reuters -- the highest of their five rating categories.  To put that in perspective, of the Analysts' consensus ratings reported by Reuters (7 Analysts currently follow SBGI), only 5.9% of 3,593 optionable stocks are now 'Buy'-rated. 

As detailed below, a potential outcome for this investment is +1.9% absolute return-on-investment for the next 18 days (equivalent to +37.8% on an annualized return basis) if the stock closes above the $31.00 strike price on the December 15th options expiration date.

Sinclair Broadcast Group, Inc. (SBGI) -- New Covered Calls Position

The transactions were as follows:
11/28/2017 Bought 500 shares of Sinclair stock @ $32.55 per share 
11/28/2017 Sold 5 Sinclair Dec 15th, 2017 $31.00 Call options @ $1.95 per share
Note: this was a simultaneous Buy/Write transaction
11/30 Upcoming ex-dividend of $.18 per share

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $15,308.30
= ($32.55 - $1.95)* 500 shares + $8.30 commission

Net Profit Components:
(a) Options Income: +$975.00
= ($1.95* 500 shares)
(b) Dividend Income: +$90.00
= $.18 per share * 500 shares 
(c) Capital Appreciation (If SBGI is above $31.00 strike price at Dec 15th expiration): -$779.95
= ($31.00 -$32.55)* 500 shares - $4.95 commission

Potential Total Net Profit (If assigned at expiration): +$285.05
= (+$975.00 options income +$90.00 dividend income -$779.95 capital appreciation)

Absolute Return: +1.9%
= +$285.05/$15,308.30
Equivalent Annualized Return: +37.8%
= (+$285.05/$15,308.30)*(365/18 days)

The downside 'breakeven price' at expiration is at $30.42 ($32.55 - $1.95 - $.18), which is 6.5% below the current market price of $32.55.  This is substantial protection given the relatively high +37.8% potential annualized ROI for this investment.

Using the Black-Scholes Options Pricing Model, the probability of making a profit (if held until the December 15th, 2017 options expiration) for this Sinclair Covered Calls position is 72.3%, so the expected value annualized ROI of this investment (if held until expiration) is +27.4% (+37.8% * 72.4%), a nice expected value result for this moderately in-the-money Covered Calls position.   

Covered Calls Established for General Motors Co. and Schlumberger N.V.

Today, Covered Calls positions were established with General Motors Co. (ticker GM) and Schlumberger N.V. (ticker SLB).  Given the Covered Calls Advisor's current cautious overall market outlook, moderately in-the-money Covered Calls positions were established for both positions.  Also, there are upcoming ex-dividends prior to the December 15th options expiration date for both companies which is taken into consideration in the details presented below.

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

• For General Motors: A +1.03% absolute return (equivalent to +37.7% annualized return for the next 11 days) if the stock is assigned early (business day prior to the December 7th ex-div date); OR A +1.93% absolute return (equivalent to +37.0% annualized return over the next 19 days) if the stock is assigned on the Dec 15th, 2017 options expiration date.
• For Schlumberger: A +0.73% absolute return (equivalent to +33.5% annualized return for the next 9 days) if the stock is assigned early (business day prior to the December 5th ex-div date); OR A +1.57% absolute return (equivalent to +30.2% annualized return over the next 19 days) if the stock is assigned on the Dec 15th, 2017 options expiration date.

These results for both companies would well exceed the Covered Calls Advisor's target for a greater than +20% potential annualized return-on-investment.


As shown in the chart below, Covered Calls positions were established in both GM and Schluberger since their potential returns are preferable in comparison to their synthetically equivalent short 100% Cash-Secured Put options positions:

You will notice in the chart above (click on chart to view a larger and more legible version) that there is a column titled "Intervening Earnings" and "NO*" with an indication that "If 'YES' then consider avoiding position".  The next earnings report for both companies is after the December 15th options expiration date. 

Also in the chart above is a column called "Intervening Ex-Div" and "YES" with an indication that "If 'YES' then complete Dividend Capture Strategy spreadsheet".  This means that both GM and SLB will go ex-dividend prior to the Dec 15th expiration and therefore the Covered Calls Advisor's Dividend Capture Strategy spreadsheet should be completed to determine if the pre-determined criteria are met to justify establishing these Covered Calls positions.

The Covered Calls Advisor has established a set of eleven criteria to evaluate potential Covered Calls using a dividend capture strategy.  The minimum threshold desired to establish a position is that at least nine of these eleven criteria must be achieved.  As shown in the table below, all eleven criteria are achieved for both the GM and the Schlumberger Covered Calls positions.

Covered Calls Positions Continued in Citigroup Inc. and Freeport-McMoRan Inc.

Last Friday, the November 17th, 2017 Covered Calls positions in Citigroup Inc. (ticker symbol C) and Freeport-McMoRan Inc. (ticker FCX) expired with the stock prices below their strike prices.  So, their Call options expired and their stock shares were retained in the Covered Calls Advisor's Portfolio.  This morning, the Covered Calls Advisor continued both Covered Calls positions by selling December 15th, 2017 Call options against both long stock positions.

Some potential return-on-investment results for each position are:  

• Citigroup Inc. -- A +2.0% absolute return in 53 days (equivalent to a +13.9% annualized return-on-investment if stock price unchanged at $71.86 at the December 15th expiration; OR a +2.9% absolute return in 53 days (equivalent to a +20.0% annualized return if Citi stock closes above the $72.50 strike price on the December 15th expiration date.
• Freeport-McMoRan Inc. -- A +6.2% absolute return in 42 days (equivalent to a +53.6% annualized return if FCX stock remains above the $14.00 strike price on the December 15th expiration date.

The transactions to-date and potential return-on-investment results for both positions are detailed below. 

1. Citigroup Inc.(C) -- Covered Calls Position Continued

The transactions to-date are as follows:
10/23/2017 Bought 400 shares of Citigroup stock @ $73.76 per share 
10/23/2017 Sold 4 Citigroup Nov 17th, 2017 $72.50 Call options @ $1.97 per share
Note: this was a simultaneous Buy/Write transaction
11/03/2017 $128.00 ex-dividend ($.32 per share x 400 shares)
11/17/2017 4 Citi Nov. 17th Call options expired and 400 shares of Citi stock were retained in the Covered Calls Advisor Portfolio
Note: the price of Citi stock was $71.33 upon the options expiration.
11/20/2017 Continuation of Citi Covered Calls position by selling 4 Dec 15th, 2017 Call options at the $72.50 strike @ $1.09 per share
Note: Citi stock was at $71.86 when this transaction occurred

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Cost Basis: $28,723.63
= ($73.76 - $1.97)* 400 shares + $7.63 commission

Net Profit Components:
(a) Options Income: +$1,216.37
= ($1.97 + $1.09) * 400 shares -$7.63 commission
(b) Dividend Income: +$128.00
= $.32 per share * 400 shares 
(c) Capital Appreciation (If Citi stock price is unchanged at current $71.86 at Dec 15th expiration): -$764.95
= ($71.86 -$73.76)* 400 shares - $4.95 commission; OR
(c) Capital Appreciation (If Citi stock closes above $72.50 strike price at expiration) : -$508.95
= ($72.50 -$73.76)* 400 shares - $4.95 commission

Two Potential Total Net Profits:
(a) If Citi stock price is unchanged at current $71.86 at Dec 15th expiration: +$579.42
= (+$1,216.37 options income +$128.00 dividend income -$764.95 capital appreciation); OR
(b) If Citi stock price is above $72.50 strike price at Dec 15th expiration) +$835.42
= (+$1,216.37 options income +$128.00 dividend income -$508.95 capital appreciation)

Two Potential Return-on-Investment Results:
(a) If Citi stock price is unchanged at current $71.86 at Dec 15th expiration:
Absolute Return : +2.0%
= +$579.42/$28,723.63
Equivalent Annualized Return: +13.9%
= (+$579.42/$28,723.63)*(365/53 days); OR
(b) If Citi stock price is above $72.50 strike price at Dec 15th expiration:
Absolute Return : +2.9%
= +$835.42/$28,723.63
Equivalent Annualized Return: +20.0%
= (+$835.42/$28,723.63)*(365/53 days)


2. Freeport-McMoRan Inc. (FCX) -- Covered Calls Position Continued

The implied volatility of the Call options was 34.2 when this position was originally established and 33.8 when the Dec 15th Calls were sold today.  There are no ex-dividend dates or earnings reports scheduled prior to the December 15th options expiration date.

The transactions were as follows:
11/03/2017 Bought 1,000 shares of Freeport-McMoRan stock @ $14.11 per share 
11/03/2017 Sold 10 FCX November 17th, 2017 $14.00 Call options @ $.44 per share
Note: this was a simultaneous Buy/Write transaction with excellent options liquidity at 38,263 open interest.
11/17/2017 10 FCX Nov. 17th Call options expired and 1,000 shares of Freeport McMoRan stock were retained in the Covered Calls Advisor Portfolio
Note: the price of FCX stock was $13.86 upon the options expiration.
11/20/2017 Continuation of FCX Covered Calls position by selling 10 Dec 15th, 2017 Call options at the $14.00 strike @ $.53 per share
Note: Freeport-McMoRan stock was at $14.03 when this transaction occurred

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $13,681.65
= ($14.11 - $.44)* 1,000 shares + $11.65 commissions

Net Profit Components:
(a) Options Income: +$958.35
= ($.44 + $.53)* 1,000 shares - $11.65 commission
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If FCX stock is above $14.00 strike price at Dec 15th expiration): -$114.95
= ($14.00 -$14.11)* 1,000 shares - $4.95 commission

Total Net Profit: +$843.40
= (+$958.35 options income +$0.00 dividend income -$114.95 capital appreciation)

Absolute Return: +6.2%
= +$843.40/$13,681.65
Equivalent Annualized Return: +53.6%
= (+$843.40/$13,681.65)*(365/42 days)

Closed Postion in Wynn Resorts Ltd.

Last Friday, the November 17th, 2017 Covered Calls position in Wynn Resorts Ltd. (ticker symbol WYNN) expired with the stock price at $152.28, below the $152.50 strike price -- so the Call options expired and the 100 shares were retained in the Covered Calls Advisor's Portfolio.  The stock moved higher this morning at the market opening and the position was closed out by selling the 100 shares at $154.71.  As detailed below, this weekly Covered Calls position achieved a return-on-investment result of +2.1% absolute return in 6 days (equivalent to a +130.5% annualized return-on-investment).

Wynn Resorts Ltd. (WYNN) -- New Covered Calls Position
The transactions were as follows:
11/14/2017 Bought 100 shares of Wynn Resorts stock @ $153.90 per share 
11/14/2017 Sold 1 WYNN Nov. 17th, 2017 $152.50 Call option @ $2.00 per share
Note: this was a simultaneous Buy/Write transaction with relatively good options liquidity of 1,754 open interest contracts.  The implied volatility of the Call options was 17.9 when this position was established.
11/17/2017 The WYNN 11/17/2017 $152.50 Call option expired and the 100 shares of stock was retained.  Note: the price of the stock was $152.28 upon the options expiration.
11/20/2017 Sold 100 WYNN shares at $154.71.  

The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $15,195.62
= ($153.90 - $2.00)* 100 shares + $5.62 commissions

Net Profit Components:
(a) Options Income: +$200.00
= ($2.00* 100 shares)
(b) Dividend Income: +$50.00
= $.50/share * 100 shares 
(c) Capital Appreciation: -$76.05
= ($154.71 -$153.90)* 100 shares - $4.95 commission

Total Net Profit: +$326.05
= (+$200.00 options income +$50.00 dividend income +$76.05 capital appreciation)

Absolute Return: +2.1%
= +$326.05/$15,195.62
Equivalent Annualized Return: +130.5%
= (+$326.05/$15,195.62)*(365/6 days)

November 17th, 2017 Option Expiration Results

The Covered Calls Advisor Portfolio had seven positions with November 17th, 2017 options expirations.  As posted this past Friday on this blog, two in-the-money Covered Calls positions (Best Buy Inc. and Devon Energy Corp.) were continued by rolling them out to the December 15th expiration at the same strike price they had for the November 17th expiration.

Of the remaining five positions, two (Alibaba Group Holding Ltd. and CVS Health Corporation) closed in-the-money, so the maximum possible return-on-investment result was achieved.  Details of the transactions and results for each of these positions was:

• Alibaba Group Holding Ltd.:  +2.2% absolute return (+31.2% annualized return) in 26 days
• CVS Health Corporation:  +2.4% absolute return (+24.0% annualized return) in 36 days 

The cash now available in the Covered Calls Advisor Portfolio from the closing of these two positions will be retained until new Covered Calls and/or 100% Cash-Secured Puts positions are established.  Any new position(s) established with this available cash will be posted on this site on the same day the transactions occur.  

The remaining three positions (Citigroup Inc., Freeport McMoRan Inc., and Wynn Resorts Ltd.) closed yesterday with their stock price below their strike prices, so those shares will remain in the Covered Calls Advisor Portfolio (see holdings in right sidebar) until they are either sold or a continuation Covered Calls position is established. 

The details for each of the closed positions is as follows:


1. Alibaba Group Holding Ltd. (BABA) -- Covered Calls Position Closed

The implied volatility of the Call options was 39.5 when this position was established.  This is a very high level which in large part is due to the uncertainty associated with the earnings report on Nov 2nd and its annual Singles Day sale on Nov 11th.

The transactions were as follows:
10/23/2017 Bought 300 shares of Alibaba stock @ $174.13 per share 
10/23/2017 Sold 3 Alibaba November 17th, 2017 $165.00 Call options @ $12.73 per share
Note: this was a simultaneous Buy/Write transaction
11/17/2017 3 BABA Call options assigned and 300 shares sold @ $165.00 strike price.
Note: the price of Alibaba stock was $185.13 at options expiration.

The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $48,426.96
= ($174.13 - $12.73)* 300 shares + $6.96 commission

Net Profit Components:
(a) Options Income: +$3,819.00
= ($12.73* 300 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (BABA stock was above $165.00 strike price at Nov 17th expiration): -$2,743.95
= ($165.00 -$174.13)* 300 shares - $4.95 commission

Total Net Profit: +$1,075.05
= (+$3,819.00 options income +$0.00 dividend income -$2,743.95 capital appreciation)

Absolute Return: +2.2%
= +$1,075.05/$48,426.96
Equivalent Annualized Return: +31.2%
= (+$1,075.05/$48,426.96)*(365/26 days)



2. CVS Health Corporation (CVS) -- Covered Calls Position Closed
The transactions were as follows:
10/13/2017 Bought 300 shares of CVS stock @ $72.84 per share 
10/13/2017 Sold 3 CVS Nov 17th, 2017 $70.00 Call options @ $3.99 per share
Note: this was a simultaneous Buy/Write transaction
10/23/2017 Ex-dividend of $150.00
= $.50 per share x 300 shares
11/17/2017 3 CVS Call options assigned and 300 shares sold @ $70.00 strike price.
Note: the price of CVS stock was $70.68 at options expiration.

The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $20,661.96
= ($72.84 - $3.99)* 300 shares + $6.96 commission

Net Profit Components:
(a) Options Income: +$1,197.00
= ($3.99 * 300 shares)
(b) Dividend Income: +$150.00
= $.50 per share * 300 shares 
(c) Capital Appreciation (If CVS is above $70.00 strike price at Nov 17th expiration): -$856.95
= ($70.00 -$72.84)* 300 shares - $4.95 commission

Total Net Profit: +$490.05
= (+$1,197.00 options income +$150.00 dividend income -$856.95 capital appreciation)

Absolute Return: +2.4%
= +$490.05/$20,661.96
Equivalent Annualized Return: +24.0%
= (+$490.05/$20,661.96)*(365/36 days)

Established Covered Calls Position in The Coca-Cola Company

Today, a new Covered Calls position was established in The Coca-Cola Company (ticker KO) at the $45.00 strike price and for the December 15th, 2017 options expiration date.

As detailed below, a potential return-on-investment is +1.4% absolute return in 29 days (equivalent to a +17.7% annualized return-on-investment).  This return includes a $.37 per share quarterly ex-dividend on November 30th plus a potential time value (i.e. extrinsic value) profit of $.27 [$.69 options income - ($45.42 stock cost - $45.00 strike price)]. 


The Coca-Cola Company (KO) -- New Covered Calls Position

The transactions were as follows:
11/17/2017 Bought 400 shares of The Coca-Cola Company stock @ $45.42 per share 
11/17/2017 Sold 4 Coca-Cola Dec 15th, 2017 $45.00 Call options @ $.69 per share
Note: this was a simultaneous Buy/Write transaction
11/30/2017 Upcoming Ex-Dividend of $.37 per share

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $17,899.63
= ($45.42 - $.69)* 400 shares + $7.63 commission

Net Profit Components:
(a) Options Income: +$276.00
= ($.69* 400 shares)
(b) Dividend Income: +$148.00
= $.37 per share * 400 shares 
(c) Capital Appreciation (If Coca-Cola stock is above $45.00 strike price at Dec 15th expiration): -$172.95
= ($45.00 -$45.42)* 400 shares - $4.95 commission

Total Net Profit: +$251.05
= (+$276.00 options income +$148.00 dividend income -$172.95 capital appreciation)

Absolute Return: +1.4%
= +$251.05/$17,899.63
Equivalent Annualized Return: +17.7%
= (+$251.05/$17,899.63)*(365/29 days)

The downside 'breakeven price' at expiration is at $44.36 ($45.42 stock price - $.69 options income - $.37 dividend income), which is 2.3% below the current market price of $45.42.

Rolled Out Covered Calls Position in Devon Energy Corp.

This afternoon, with today's (i.e. Nov 17th, 2017) $36.00 strike price Covered Calls position in Devon Energy well in-the-money, the Covered Calls Advisor decided continue with this Covered Calls position that was first established six months ago.  The current position was rolled out to the Dec 15th Covered Calls at the identical $36.00 strike price.  This was done with only about $.02 time value remaining in the November Call options and a net credit in the rollout of $.41 per share was achieved ($3.14 income for December Calls sold minus $2.73 debit for Nov. 17th Calls bought-to-close).  Based on the Covered Calls Advisor's current market overall Neutral sentiment, a moderately in-the-money position was established.

As detailed below, a potential return-on-investment result for this Devon Energy position is +12.8% absolute return for 204 days (equivalent to a +22.9% annualized return-on-investment).  


Devon Energy Corp. (DVN) -- Continuation Covered Calls Position

The transactions to-date have been as follows:
05/25/2017  Bought 500 Devon Energy Corp. shares @ $37.45
05/25/2017 Sold 5 DVN June 16, 2017 $36.00 Call options @ $2.10
Note: this was a simultaneous buy/write transaction.
06/13/2017 Ex-dividend of $30.00 ($.06 x 500 shares)
06/16/2017 5 DVN June 16th, 2017 Call options expired
Note: the price of DVN stock closed at $31.76 upon the June 16th options expiration date.
07/03/2017 Sold 5 DVN July 21, 2017 $33.00 Call options @ $.87 per share
07/21/2017 5 DVN Call options expired
07/26/2017 Sold 5 DVN Aug 18, 2017 $35.00 Call options @ $.65 per share
08/18/2017 5 DVN Call options expired
Note: the price of DVN stock was $30.40 upon expiration of the Aug 18th Call options
09/14/2017 Ex-dividend of $30.00 ($.06 x 500 shares)
09/14/2017 Sold 5 DVN October 20th, 2017 $35.00 Call options @ $.89 per share
Note: the price of DVN stock was $34.12 today when the Oct 20th Call options were sold
10/20/2017 5 DVN Call options expired
Note: the price of DVN stock was $34.92 upon expiration of the Oct 20th Call options
10/27/2017 Sold 5 DVN November 17th, 2017 $36.00 Call options @ $.93 per share
Note: the price of DVN stock was $35.66 today when the Nov 17th Call options were sold
11/17/2017 Bought-to-Close 5 DVN Nov 17th $36.00 Call options @ $2.73
11/17/2017 Sold-to-Open 5 DVN Dec 15th, 2017 $36.00 Call options @ $3.14
12/14/2017 Upcoming Ex-Dividend of $.06 per share

A possible overall performance result (including commissions) would be as follows:
Cost Basis of Original Covered Calls Position Established in DVN: $17,679.95
= ($37.45 - $2.10)*500 + $4.95 commission

Net Profit Components:
(a) Options Income: +$2,904.90
= ($2.10 + $.87 + $.65 + $.89 +$.93 -$2.73 +$3.14) *500 shares - 6*$3.35 commissions
(b) Dividend Income: +$90.00
= ($.06 + $.06 + $.06) * 500 shares
(c) Capital Appreciation (If DVN is above $36.00 strike price at the Dec 15th, 2017 expiration): -$729.95
= ($36.00-$37.45)*500 shares - $4.95 commissions

Total Net Profit (If DVN stock is above $36.00 strike price at Dec 15, 2017 options expiration): +$2,264.95
= (+$2,904.90 options income +$90.00 dividends -$729.95 capital appreciation)

Absolute Return: +12.8%
= +$2,264.95/$17,679.95
Annualized Return: +22.9%
= (+$2,264.95/$17,679.95)*(365/204 days)

Rolled Out Covered Calls Position in Best Buy Inc.

This morning, when the price of Best Buy dipped to about $54.30, the Covered Calls Advisor rolled out from today's (i.e. Nov 17th) $52.50 strike price Covered Calls to the Dec 15th Covered Calls at the identical $52.50 strike price.  This was done with only about $.05 time value remaining in the November Call options and a net credit in the rollout of $.76 per share was achieved ($2.68 income for December 15th Calls sold minus $1.92 debit for Nov. 17th Calls bought-to-close).  Based on the Covered Calls Advisor's current market overall Neutral sentiment, a moderately in-the-money position was established.

As detailed below, a potential return-on-investment result for this Best Buy position is +5.3% absolute return for 51 days (equivalent to a +37.8% annualized return-on-investment).  


Best Buy Inc. (BBY) -- New Covered Calls Position
The implied volatility of the Call options was 25.6 today when this position was established. 
The transactions were as follows:
10/25/2017 Bought 400 shares of Best Buy stock @ $55.11 per share 
10/25/2017 Sold 4 Best Buy November 17th, 2017 $52.50 Call options @ $4.23 per share
Note: this was a simultaneous Buy/Write transaction
11/17/2017 Bought-to-Close 4 Nov 17th $52.50 Call options @ $1.92 per share
11/17/2017 Sold -to-Open 4 Dec 15th, 2017 $52.50 Call options @ $2.68 per share
Note: this was a simultaneous Net Credit transaction of $.76 when the BBY stock was at $54.30.
12/05/2017 Upcoming ex-dividend of $.34 per share


A possible overall performance result (including commissions) if Best Buy is in-the-money at the Dec 15th expiration would be as follows:
Covered Calls Original Cost Basis: $20,359.63
= ($55.11 - $4.23)* 400 shares + $7.63 commission

Net Profit Components:
(a) Options Income: +$1,988.37
= ($4.23 - $1.92 + $2.68) * 400 shares) - $7.63 commissions
(b) Dividend Income: +$136.00
= $.34 per share * 400 shares
(c) Capital Appreciation (If BBY stock is above $52.50 strike price at Dec 15th expiration): -$1,048.95
= ($52.50 -$55.11)* 400 shares - $4.95 commission

Total Net Profit: +$1,075.42
= (+$1,988.37 options income +$136.00 dividend income -$1,048.95 capital appreciation)

Absolute Return: +5.3%
= +$1,075.42/$20,359.63
Equivalent Annualized Return: +37.8%
= (+$1,075.42/$20,359.63)*(365/51 days)

Established Covered Calls Position in Bank of America Corp.

Today, a second Covered Calls position was established in Bank of America Corp. (ticker BAC) at the $25.00 strike price and the December 15th, 2017 options expiration date.
The Covered Calls Advisor read today's news that Warren Buffett had increased his holdings in BAC during the 3rd quarter.  Since the stock price declined in early morning trading and based on knowledge that many investors piggyback Buffett's stock picks, I was fortunate to be able to establish this position when the stock was very near its lowest price today.  As detailed below, a potential return-on-investment is +1.8% absolute return in 31 days (equivalent to a +21.7% annualized return-on-investment).  This attractive return includes $.12 per share quarterly ex-dividend on November 30th. 



Bank of America Corp. (BAC) -- New Covered Calls Position

The transactions were as follows:
11/15/2017 Bought 1,000 shares of Bank of America stock @ $25.83 per share 
11/15/2017 Sold 10 Bank of America Dec 15th, 2017 $25.00 Call options @ $1.17 per share
Note: this was a simultaneous Buy/Write transaction

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $24,671.65
= ($25.83 - $1.17)* 1,000 shares + $11.65 commission

Net Profit Components:
(a) Options Income: +$1,170.00
= ($1.17* 1,000 shares)
(b) Dividend Income: +$120.00 = $.12 per share * 1,000 shares 
(c) Capital Appreciation (If BAC is above $25.00 strike price at Dec 15th expiration): -$834.95
= ($25.00 -$25.83)* 1,000 shares - $4.95 commission

Total Net Profit: +$455.05
= (+$1,170.00 options income +$120.00 dividend income -$834.95 capital appreciation)

Absolute Return: +1.8%
= +$450.05/$24,671.65
Equivalent Annualized Return: +21.7%
= (+$450.05/$24,671.65)*(365/31 days)

The downside 'breakeven price' at expiration is at $24.54 ($25.83 stock price - $1.17 options income - $.12 dividend income), which is 5.0% below the current market price of $25.83.

Established Covered Call Weekly in Wynn Resorts Ltd.

Today, a new Covered Calls positions was entered in Wynn Resorts Ltd. (ticker symbol WYNN) for the November 17th, 2017 options expiration and at the $152.50 strike price when the stock was at $153.90.  The Covered Calls Advisor normally establishes monthly positions, but this is a weekly position that expires this Friday.  The transactions and a potential result for this position described below includes the $.50 ex-dividend tomorrow.  Based on the Covered Calls Advisor's current Neutral sentiment, the closest in-the-money position was established.

As detailed below, a potential return-on-investment is +0.7% absolute return in 4 days (equivalent to a +63.1% annualized return-on-investment).

Wynn Resorts Ltd. (WYNN) -- New Covered Calls Position
The transactions were as follows:
11/14/2017 Bought 100 shares of Wynn Resorts stock @ $153.90 per share 
11/14/2017 Sold 1 WYNN Nov. 17th, 2017 $152.50 Call option @ $2.00 per share
Note: this was a simultaneous Buy/Write transaction with relatively good options liquidity of 1,754 open interest contracts.  The implied volatility of the Call options was 17.9 when this position was established. 


A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $15,195.62
= ($153.90 - $2.00)* 100 shares + $5.62 commissions

Net Profit Components:
(a) Options Income: +$200.00
= ($2.00* 100 shares)
(b) Dividend Income: +$50.00
= $.50/share * 100 shares 
(c) Capital Appreciation (If WYNN stock is above $152.50 strike price at Nov 17th expiration): -$144.95
= ($152.50 -$153.90)* 100 shares - $4.95 commission

Total Net Profit: +$105.05
= (+$200.00 options income +$50.00 dividend income -$144.95 capital appreciation)

Absolute Return: +0.7%
= +$105.05/$15,195.62
Equivalent Annualized Return: +63.1%
= (+$105.05/$15,195.62)*(365/4 days)


The downside 'breakeven price' at expiration is at $151.40 ($153.90 - $.50 - $2.00), which is 1.6% below the current market price of $153.90.

Established Covered Calls in Blackstone Group L.P.

Today, a new Covered Calls positions was entered in Blackstone Group L.P. (ticker BX) for the December 15th, 2017 options expiration and at the $31.00 strike price when the stock was at $31.96.  Based on the Covered Calls Advisor's current Neutral sentiment, the closest in-the-money position was established.

As detailed below, a potential return-on-investment is +1.7% absolute return in 36 days (equivalent to a +17.3% annualized return-on-investment).

Blackstone Group L.P. (BX) -- New Covered Calls Position

The implied volatility of the Call options was 25.2 when this position was established.  There are no ex-dividend dates or earnings reports scheduled prior to the December 15th options expiration date.

The transactions were as follows:
11/10/2017 Bought 500 shares of Blackstone Group stock @ $31.96 per share 
11/10/2017 Sold 5 BX December 15th, 2017 $31.00 Call options @ $1.49 per share
Note: this was a simultaneous Buy/Write transaction with relatively low options liquidity at only 167 open interest contracts.

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $15,243.30
= ($31.96 - $1.49)* 500 shares + $8.30 commissions

Net Profit Components:
(a) Options Income: +$745.00
= ($1.49* 500 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If BX stock is above $31.00 strike price at Dec 15th expiration): -$484.95
= ($31.00 -$31.96)* 500 shares - $4.95 commission

Total Net Profit: +$260.05
= (+$745.00 options income +$0.00 dividend income -$484.95 capital appreciation)

Absolute Return: +1.7%
= +$260.05/$15,243.30
Equivalent Annualized Return: +17.3%
= (+$260.05/$15,243.30)*(365/36 days)

The downside 'breakeven price' at expiration is at $30.47 ($31.96 - $1.49), which is 4.7% below the current market price of $31.96.

The 'crossover price' at expiration is $33.45 ($31.96 + $1.49).  This is the price above which it would have been more profitable to buy-and-hold Blackstone Group stock until the December 15th, 2017 options expiration date.

Established Covered Calls in Delta Air Lines Inc.

Today, a Covered Calls position was established in Delta Air Lines (DAL) for the December 15th, 2017 options expiration date.  Given the Covered Calls Advisor's current neutral overall market outlook, a moderately in-the-money position was established. Also, there is an upcoming ex-dividend date next week which is taken into consideration in the calculations below.

A potential return-on-investment result is +2.24% absolute return in 36 days (equivalent to a +22.7% annualized return-on-investment if assigned at expiration).

Details for the Delta Air Lines position are provided below to explain the position further for those interested in understanding the type of thought processes and calculations underlying establishing these Covered Calls positions.
 
Delta Air Lines Inc. (DAL) -- New Covered Calls Position

First and foremost, is is essential to invest only in companies that you are bullish about.  Delta meets the Covered Calls Advisor's key quality, value, and growth metrics.  My bullish sentiment is shared by many respected analysts including their highest rating category by Argus, CFRA, and the Average Analysts' Ratings as reported by Reuters.  Also, as shown below, the potential rate-of-return exceeds the Covered Calls Advisor's desired threshold of +20% annualized return if assigned at expiration.  Another positive is the industry high annual dividend yield of 2.5% and this Covered Calls position is likely to capture Delta's next quarterly $.305 ex-dividend next week.

Because of Put/Call parity, Covered Calls and Cash-Secured Puts are synthetically equivalent strategies (when done at the same strike price for the same expiration date).  However, subtle and temporary differences often exist, so just prior to executing the transactions, a comparison is made to see which strategy provides a better potential return.  For Delta, the chart below shows that the potential annualized return of +22.7% for the Covered Calls position is preferable to the +21.6% for a 100% Cash-Secured Puts position in this instance:
 

Notice in the chart above (click on chart to view a larger and more legible version) that there is a column titled "Intervening Earnings" and "NO*" with an indication that "If 'YES' then consider avoiding position".  The "NO" in this case means that Delta does not have a quarterly earnings report prior to the options expiration.

Also in the chart above is a column called "Intervening Ex-Div" and "YES" with an indication that "If 'YES' then complete Dividend Capture Strategy spreadsheet".  This means that Delta will go ex-dividend sometime between today and the options expiration date and the Covered Calls Advisor's Dividend Capture Strategy spreadsheet should be completed to assess whether the pre-determined criteria are met to justify establishing a covered calls position for Delta.  The Covered Calls Advisor has established a set of eleven criteria to evaluate potential covered calls using a dividend capture strategy.  The minimum threshold desired to establish a position is that at least nine of these eleven criteria must be achieved.  As shown in the table below, all eleven criteria are achieved for this Delta Air Lines Inc. position.

The detailed transactions and calculations are as follows:
11/10/2017  Bought 500 Delta Air Lines Inc. shares @ $49.19
11/10/2017 Sold 5 DAL Dec 15, 2017 $47.00 Call options @ $2.86
The Call options Open Interest was 680 contracts when this position was established and their Implied Volatility was 26.9
Note: this was a simultaneous buy/write transaction.
11/16/2017 Upcoming $.305 ex-dividend


A possible overall performance result (including commissions) would be as follows:
Cost Basis Purchase of 500 shares DAL: $23,138.30
= ($49.12 -$2.86)*500 + $8.30 commissions

Net Profit:
(a) Options Income: +$1,430.00
= ($2.86*500 shares)
(b) Dividend Income: +$152.50
= $.305 per share x 500 shares
(c) Capital Appreciation (If DAL is above $47.00 strike price at Dec 15th expiration): -$1,064.95
= ($47.00-$49.12)*500 shares - $4.95 commissions

Total Net Profit (If DAL is above $47.00 strike price at Dec 15, 2017 options expiration): +$532.45
= (+$1,430.00 options income +$152.50 dividends -$1,050.05 capital appreciation)

Absolute Return: +2.3%
= +$532.45/$23,138.30
Annualized Return: +23.3%
= (+$532.45/$23,138.30)*(365/36 days)

The downside 'breakeven price' at expiration is at $45.955 ($49.12 - $2.86 -$.305), which is 6.4% below the current market price of $49.12. 

Using the Black-Scholes Options Pricing Model, the probability of making a profit (if held until the Dec 15th, 2017 options expiration) for this Delta Air Lines covered calls position is 70.3%, so the expected value annualized ROI of this investment (if held until expiration) is +16.4% (+23.3% * 70.3%), an attractive result for this moderately in-the-money covered calls position.

The 'crossover price' at expiration is $51.675 ($49.12 + $2.86 -$.305).  This is the price above which it would have been more profitable to simply buy-and-hold Delta Air Lines stock until December 15th (the December monthly options expiration date) rather than establishing this Covered Calls position.

Established Covered Calls Positions in Alibaba Group Holding Ltd. and Bank of America Corp.

Today, two new Covered Calls positions were entered in Alibaba Group Holding Ltd. (ticker BABA) and Bank of America Corp. (ticker BAC).   Both positions were established for the December 15th, 2017 options expiration date and given the Covered Calls Advisor's current Overall Market Meter sentiment of Neutral, in-the-money positions were established.

As detailed below, the potential return-on-investments are:

• Alibaba Group:  A +2.3% absolute return in 37 days (equivalent to a +22.2% annualized return-on-investment); and
• Bank of America Corp.:  A +1.6% absolute return in 37 days (equivalent to a +15.6% annualized return-on-investment) 

The transactions and potential results are detailed below:

1. Alibaba Group Holding Ltd. (BABA) -- New Covered Calls Position

The implied volatility of the Call options was 30.5 when this position was established, a high level given there is no earnings report prior to the December 15th options expiration.

The transactions were as follows:
11/09/2017 Bought 300 shares of Alibaba stock @ $182.08 per share 
11/09/2017 Sold 3 Alibaba December 15th, 2017 $175.00 Call options @ $11.28 per share
Note: this was a simultaneous Buy/Write transaction

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $51,246.96
= ($182.08 - $11.28)* 300 shares + $6.96 commission

Net Profit Components:
(a) Options Income: +$3,384.00
= ($11.28* 300 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If BABA stock is above $175.00 strike price at Dec 15th expiration): -$2,128.95
= ($175.00 -$182.08)* 300 shares - $4.95 commission

Total Net Profit: +$1,155.05
= (+$3,284.00 options income +$0.00 dividend income -$2,128.95 capital appreciation)

Absolute Return: +2.3%
= +$1,155.05/$51,246.96
Equivalent Annualized Return: +22.2%
= (+$1,155.05/$51,246.96)*(365/37 days)

The downside 'breakeven price' at expiration is at $170.80 ($182.08 - $11.28), which is 6.2% below the current market price of $182.08.

Using the Black-Scholes Options Pricing Model, the probability of making a profit (if held until the December 15th, 2017 options expiration) for this Alibaba Covered Calls position is 67.8%, so the expected value annualized ROI of this investment (if held until expiration) is +15.1% (+22.2% * 67.8%), a nice result for this moderately in-the-money Covered Calls position.

The 'crossover price' at expiration is $193.36 ($182.08 + $11.28).  This is the price above which it would have been more profitable to simply buy-and-hold Alibaba stock until the December 15th, 2017 options expiration date.


2. Bank of America Corp. (BAC) -- New Covered Calls Position

The implied volatility of the Call options was 24.1 when this position was established.  There is no intervening earnings report prior to expiration.  There is an upcoming ex-dividend of $.12 on November 30th which is included in the analysis below.

The transactions were as follows:
11/09/2017 Bought 1,000 shares of Bank of America stock @ $26.29 per share 
11/09/2017 Sold 10 Bank of America Dec 15th, 2017 $25.00 Call options @ $1.57 per share
Note: this was a simultaneous Buy/Write transaction

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $24,731.65
= ($26.29 - $1.57)* 1,000 shares + $11.65 commission

Net Profit Components:
(a) Options Income: +$1,570.00
= ($1.57* 1,000 shares)
(b) Dividend Income: +$120.00 = $.12 per share * 1,000 shares 
(c) Capital Appreciation (If BAC is above $25.00 strike price at Dec 15th expiration): -$1,294.95
= ($25.00 -$26.29)* 1,000 shares - $4.95 commission

Total Net Profit: +$395.05
= (+$1,570.00 options income +$120.00 dividend income -$1,294.95 capital appreciation)

Absolute Return: +1.6%
= +$390.05/$24,731.65
Equivalent Annualized Return: +15.6%
= (+$390.05/$24,731.65)*(365/37 days)

The downside 'breakeven price' at expiration is at $24.60 ($26.29 stock price - $1.57 options income - $.12 dividend income), which is 6.4% below the current market price of $26.29.

Using the Black-Scholes Options Pricing Model, the probability of making a profit (if held until the December 15th, 2017 options expiration) for this Bank of America Covered Calls position is 71.5%, so the expected value annualized ROI of this investment (if held until expiration) is +11.2% (+15.6% * 71.5%), a nice result for this in-the-money Covered Calls position.   

Established Covered Calls in Freeport-McMoRan Inc.

Today, a new Covered Calls positions was entered in Freeport-McMoRan Inc. (ticker FCX) for the November 17th, 2017 options expiration and at the $14.00 strike price when the stock was at $14.11.  Based on the Covered Calls Advisor's current Neutral sentiment, the closest at-the-money position was established.

As detailed below, a potential return-on-investment is +2.4% absolute return in 15 days (equivalent to a +57.8% annualized return-on-investment).

Freeport-McMoRan Inc. (FCX) -- New Covered Calls Position

The implied volatility of the Call options was 34.2 when this position was established.  There are no ex-dividend dates or earnings reports scheduled prior to the November 17th options expiration date.

The transactions were as follows:
11/03/2017 Bought 1,000 shares of Freeport-McMoRan stock @ $14.11 per share 
11/03/2017 Sold 10 FCX November 17th, 2017 $14.00 Call options @ $.44 per share
Note: this was a simultaneous Buy/Write transaction with excellent options liquidity at 38,263 open interest.

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $13,681.65
= ($14.11 - $.44)* 1,000 shares + $11.65 commissions

Net Profit Components:
(a) Options Income: +$440.00
= ($.44* 1,000 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If FCX stock is above $14.00 strike price at Nov 17th expiration): -$114.95
= ($14.00 -$14.11)* 1,000 shares - $4.95 commission

Total Net Profit: +$325.05
= (+$440.00 options income +$0.00 dividend income -$114.95 capital appreciation)

Absolute Return: +2.4%
= +$325.05/$13,681.65
Equivalent Annualized Return: +57.8%
= (+$325.05/$13,681.65)*(365/15 days)

The downside 'breakeven price' at expiration is at $13.67 ($14.11 - $.44), which is 3.1% below the current market price of $14.11.

Using the Black-Scholes Options Pricing Model, the probability of making a profit (if held until the November 17th, 2017 options expiration) for this Freeport-McMoRan Covered Calls position is 56.8%, so the expected value annualized ROI of this investment (if held until expiration) is +33.4% (+57.8% * 56.8%), a very good result for this moderately in-the-money Covered Calls position.

The 'crossover price' at expiration is $44.55 ($44.11 + $.44).  This is the price above which it would have been more profitable to buy-and-hold Freeport-McMoRan stock until the November 17th, 2017 options expiration date.