Covered Call Position Established in Alphabet Inc.

A new Covered Call position has been established in Alphabet Inc. (ticker GOOGL) with a July 17th, 2020 options expiration date. One Alphabet Call option was sold at $85.68 at the $1,375.00 strike price when the stock price was $1,437.78.  A moderately in-the-money strike price (4.4% downside to the strike price) was chosen because of the Covered Calls Advisor's Bearish Overall Market Meter outlook.

As detailed below, the potential return-on-investment result is +1.7% absolute return in 24 days (equivalent to a +25.8% annualized return-on-investment).  

Alphabet Inc.(GOOGL) -- New Covered Call Position

The transaction was as follows:
06/24/2020 Bought 100 shares of Alphabet Inc. stock @ $1,437.78 per share 
06/24/2020 Sold 1 Alphabet Inc. July 17th, 2020 $1,375.00 Call option @ $85.68 per share
Note: this was a simultaneous Buy/Write transaction.  The Implied Volatility of the Call option was 32.2 and the Open Interest was 127 contracts when this transaction was executed. 

A possible overall performance result (including commissions) would be as follows:
Covered Call Cost Basis: $135,210.67
= ($1,437.78 - $85.68) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$8,568.00
= ($85.68 * 100 shares)
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If Alphabet stock is above $1,375.00 strike price at July 17th expiration): -$6,278.00
= ($1,375.00 - $1,437.78) * 100 shares

Total Net Profit: +$2,290.00
= (+$8,568.00 options income +$0.00 dividend income -$6,278.00 capital appreciation)

Absolute Return: +1.7%
= +$2,290.00/$135,210.67
Equivalent Annualized Return: +25.8%
= (+$2,290.00/$135,210.67)*(365/24 days)

The downside 'breakeven price' at expiration is at $1,352.10 ($1,437.78 - $85.68), which is 6.0% below the current market price of $1,437.78.