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.