October 25, 2019 Options Expiration Result -- ConocoPhillips Covered Calls Position Closed

The Covered Calls Advisor Portfolio (CCAP) contained a Covered Calls position in ConocoPhillips Company with an October 25, 2019 options expiration.  Today, with the stock price closing at $56.35, the $55.00 Call options expired in-the-money; so the 200 shares of COP stock were assigned (i.e. sold) at the $55.00 strike price.  The absolute return-on-investment (ROI) was +2.3% (equivalent to +32.5% annualized return) for the 26 days holding period, which is detailed below. 


ConocoPhillips (COP) -- Covered Calls Position Assigned at Options Expiration

The transactions were:
09/30/2019 Bought 200 ConocoPhillips shares @ $57.07
09/30/2019 Sold 2 COP 10/25/2019 $55.00 Call options @ $2.91
Note: A simultaneous buy/write transaction was executed.   The Implied Volatility was attractive at 31.2 when this position was established.
10/16/2019 Quarterly ex-dividend of $.42 per share
Note: After this Covered Calls position was established, ConocoPhillips declared a dividend amount of $.42 for its 10/16/2019 ex-dividend date, a pleasant surprise since this was a 38% increase from prior dividends of $.305 per share.
10/25/2019 Two COP Call options expired in-the-money so 200 ConocoPhillips shares sold at $55.00 strike price.
Note 1: the share price closed in-the-money at $56.35.
Note 2: the weekly 10/25/2019 Call options were sold instead of the usual monthly (Nov. 15, 2019) Call options in order avoid the uncertainty of holding the position during ConocoPhillips's next quarterly earnings report (which occurs this upcoming Tuesday -- 10/29/2019).


The overall performance result (including commissions) for this ConocoPhillips Covered Calls position were as follows:
Covered Calls Cost Basis: $10,838.29
= ($57.07 - $2.91) *200 shares + $6.29 commissions

Net Profit Components:
(a) Options Income: +$582.00
= ($2.91 * 200 shares)

(b) Dividend Income: +$84.00
= ($.42 dividend per share x 200 shares)

(c) Capital Appreciation: -$415.34
+($55.00 -$57.07) * 200 shares- $1.34 commission

Total Net Profit: +$250.66

= (+$582.00 +$84.00 -$415.34)

Absolute Return: +2.3%

= +$250.66/$10,838.29

Annualized Return (If COP stock assigned at $55.00 at Oct 25, 2019 expiration): +32.5%

= (+$250.66/$10,838.29)*(365/26 days)