Continuation of Diamondback Energy Covered Calls

Upon the October 18th, 2019 options expiration, the Covered Calls position in Diamondback Energy (ticker symbol FANG) expired with the stock price at $81.97, well below the $85.00 strike price.  So, the October Call options expired and the 200 shares of Diamondback Energy stock were retained in the Covered Calls Advisor Portfolio.  Today, with the price of Diamondback Energy stock having risen in the past two trading days to $84.13, a sell-to-open order was executed to sell 2 November 15th, 2019 Call options at the $85.00 strike price for $2.99 per share to continue this Covered Calls position.

As detailed below, two potential return-on-investment results for this Diamondback Energy position are: (1) +4.6% absolute return in 47 days (equivalent to a +35.5% annualized return-on-investment) if the stock price is unchanged at $84.13 at the November 15th, 2019 options expiration; or (2) +5.6% absolute return in 47 days (equivalent to a +43.6% annualized return-on-investment) if the stock closes above the $85.00 strike price.

Diamondback Energy (FANG) -- Continuation of Covered Calls Position

The transactions have been as follows:
09/30/2019 Bought 200 shares of Diamondback stock @ $89.61 per share 
09/30/2019 Sold 2 Diamondback October 18th, 2019 $85.00 Call options @ $6.13 per share
Note: this was a simultaneous Buy/Write transaction.  The Implied Volatility of the Call options was 39.5. 
10/18/2019 FANG stock closed at $81.97, so the two Call options expired and the 200 shares of Diamondback Energy were retained in the Covered Calls Advisor portfolio
10/22/2019 Sold 2 FANG Nov 15th, 2019 $85.00 Call options at $2.99 against the 200 shares of Diamondback stock to continue the FANG Covered Calls position.
Note: the price of FANG was $84.13 today when these Call options were sold.

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Cost Basis: $16,666.29
= ($89.61 - $6.31) * 200 shares + $6.29 commission

Net Profit Components:
(a) Options Income: +$1,858.66
= ($6.31 + $2.99) * 200 shares - $1.34 commission
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If FANG stock is at current $84.13 price at Nov 15th expiration): -$1,096.00
= ($84.13 -$89.61) * 200 shares;  OR
(c) Capital Appreciation (If FANG stock is above $85.00 strike price at Nov 15th expiration): -$922.00
= ($85.00 -$89.61) * 200 shares

Total Net Profit:
(a) If stock price unchanged at $84.13: +$762.66
= (+$1,858.66 options income +$0.00 dividend income -$1,096.00 capital appreciation); OR
(b) If stock is above $85.00 strike price at Nov 15th expiration: +$936.66
= (+$1,858.66 options income +$0.00 dividend income -$922.00 capital appreciation)

1. Absolute Return (If stock price unchanged): +4.6%
= +$762.66/$16,666.29
Equivalent Annualized Return: +35.5%
= (+$762.66/$16,666.29)*(365/47 days; OR
2. Absolute Return (If stock price closes above $85.00 strike price at expiration): +5.6%
= +$936.66/$16,666.29
Equivalent Annualized Return: +43.6%
= (+$936.66/$16,666.29)*(365/47 days)