Roll-Up of Lam Research Corp. Covered Calls

Today, the Covered Calls position in Lam Research Corp. was rolled up from the March 16th $160.00 strike price to the March 16th $180.00 strike price.  With an ex-dividend tomorrow of $.50 and the stock deep in-the-money, there was only $.05 time value remaining in the $160 strike price short Call options.  Therefore, there is a very high likelihood the stock would have been called away later today by the owner of the Calls to capture the dividend.

The Covered Calls Advisor decided to roll-up to the $180.00 strike price (with $1.90 time value remaining) to ensure that the dividend will be captured and that there is also a good possibility of also capturing the $1.90 per share time value as additional profit as long as Lam Research stock is above the $180.00 strike price on the Mar 16th expiration date.  If this occurs, the financial result would be a +3.94% absolute return in 32 days (equivalent to a +44.9% annualized return-on-investment) for this Lam Research Corp. position.  Details are provided below.


Lam Research Corp. (LRCX) -- Roll-Up Covered Calls Position

The transactions were as follows:
02/13/2018 Bought 200 shares of Lam Research stock @ $169.41 per share 
02/13/2018 Sold 2 Lam Research Mar 16th, 2017 $160.00 Call options @ $13.68 per share
Note: this was a simultaneous Buy/Write transaction
03/05/2018 Bought-to-Close 2 LRCX Mar 16th $160.00 Call options @ $33.00 per share
03/05/2018 Sold-to-Open 2 LRCX March 16th $180.00 Call options @ $14.60 per share
Note: this was a simultaneous Call spread transaction
03/06/2018 Upcoming quarterly ex-dividend of $.50 per share

A possible overall performance result (including commissions) for this ongoing Lam Research Covered Calls position is as follows:
Stock Purchase Cost Basis: $31,150.95
= ($169.41 - $13.68) * 200 shares +$4.95 commission

Net Profit:
(a) Options Income: -$985.54
= ($13.68 -$33.00 +$14.60) *200 shares - 3* $6.96 commissions
(b) Dividend Income: +$100.00
= ($.50 dividend per share x 200 shares)

(c) Capital Appreciation (If LRCX assigned at $180.00 strike price): +2,113.05
+($180.000 -$169.41)*200 shares - $4.95 commission

Total Net Profit (If LRCX assigned on March 16th, 2018 at $180.00 strike price): +$1,227.51

= (-$985.54 +$100.00 +$2,113.05)

Absolute Return (If LRCX assigned at $180.00 at March 16th, 2018 expiration): +3.94%

= +$1,227.51/$31,150.95

Annualized Return (If LRCX assigned at $180.00 at March 16, 2018 expiration): +44.9%

= (+$1,227.51/$31,150.95)*(365/32 days)