Position Closed in Marathon Petroleum Corp.

Today was the quarterly ex-dividend date for Marathon Petroleum Corporation.  Here is the Covered Calls Advisor's blog post when this position was established (link).   The Covered Calls Advisor was very surprised (and also very pleased) this morning that this MPC Covered Calls position was not exercised early by the Calls owner in order for them to capture today's $.53 dividend.  Early exercise was expected since the time value in this position had declined to $0.00 = [$7.65 midpoint of  Call options $7.55/$7.75 bid/ask spread - ($65.15 closing stock price - $57.50 strike price)] as of last Friday's (the last trading day prior to today's ex-dividend date) market close. 

So, the Covered Calls Advisor will receive the $.53 dividend payment and with the stock higher today (after adjustment to the stock price for the dividend), the position was closed by selling the 300 MPC shares and simultaneously buying back the three shorted March 15th, 2019 $57.50 Call options.  

As detailed below, this Marathon Petroleum Corp. position achieved a return-on-investment result of +1.3% absolute return in 8 days (equivalent to a +60.1% annualized return-on-investment).  This result exceeds the +43.0% that would have been achieved if this position had been exercised early or the +20.7% that would have been achieved if assigned at expiration.


Marathon Petroleum Corp. (MPC) -- Covered Calls Position Closed
The transactions were as follows:
02/011/2019 Bought 300 Marathon Petroleum shares @ $61.78
02/11/2019 Sold 3 MPC 03/15/2019 $57.50 Call options @ $4.84
Note: a simultaneous buy/write transaction was executed and the implied volatility in the option was 34.2. 
02/19/2019 Ex-dividend of $.53 per share
02/19/2019 Closed MPC Covered Calls position by selling 300 MPC shares at $64.98 and simultaneously buying back the 3 Mar 15th $57.50 Calls at $7.79 per share.  
Note: The time value remaining in this position when it was closed out was $.31 = [$7.79 Call options price - ($64.98 stock price - $57.50 strike price)]

The overall performance result (including commissions) was as follows:
Covered Calls Cost Basis: $17,086.95
= ($61.78 - $4.84) *300 shares + $4.95 commission

Net Profit Components:
(a) Options Income: -$889.02
= ($4.84 - $7.79) *300 shares - $4.02 commissions
(b) Dividend Income: +$159.00
= ($.53 dividend per share x 300 shares)

(c) Capital Appreciation: +$955.05
+($64.98 - $61.78)*300 shares - $4.95 commissions

Total Net Profit: +$225.03

= (-$889.02 options income +$159.00 dividend income +$955.05 capital appreciation)

Absolute Return: +1.3%

= +$225.03/$17,086.95

Annualized Return: +60.1%

= (+$225.03/$17,086.95)*(365/8 days)